Global mining giant Rio Tinto saw its profits increase by 33% in 2009 despite large
losses in its aluminium division and a dramatic decrease in commodity prices.
The Anglo-Australian mining company, which reports in US dollars, earned
$4.872 billion last year, up from its 2008 figure of $3.67 billion.
The profit came despite a loss of $578 million at its aluminium division, Rio
Tinto Alcan, for the year due to low prices.
However, the Montreal-based unit earned a profit in the second half of the year.
Its underlying earnings, adjusted to remove one-time items, were $111 million in
the last six months of 2009, compared with a $689 million loss in the first six.
The turnaround was due to severe cost cutting and rising prices, partly offset by
unfavourable currency exchange and higher energy costs.
“We embarked on a wholesale transformation of our aluminium business, which
put it back into profit in the second half of the year,” said Rio Tinto president and
CEO Tom Albanese.
Aluminium production was cut by 9% in the year as 16,000 employees around
the world lost their jobs and facilities closed including the Beauharnois smelter in
Overall, Rio Tinto’s earnings, excluding asset sales, impairment charges,
restructuring costs and a $195 million break fee resulting from the collapse of a
partnership deal with Chinese aluminium company Chinalco, fell 39% to $6.3 billion,
from US$10.3 billion in 2008.
A drop in the price of all major commodities last year weighed on Rio Tinto’s
earnings. Aluminium prices decreased 35%, iron ore by up to 44% and copper was
Total revenues decreased US$14 billion or 24% to US$44 billion.