Rio Tinto(RIO) - 2023 Q4 - Annual Report

Financial Performance - Consolidated sales revenue for 2023 was $54.0 billion, a decrease from $55.6 billion in 2022, reflecting a 2.9% decline[12] - Profit after tax attributable to owners of Rio Tinto was $10.1 billion, representing a profit margin of 24.3%, compared to $12.4 billion and 22.9% in 2022[12] - Underlying EBITDA for 2023 was $23.9 billion, down 9.1% from $26.3 billion in 2022, indicating a 28% EBITDA margin[12] - The company reported a total dividend per share of 435 cents, down from 492 cents in 2022, totaling $7.1 billion in dividends declared[13] - Profit after tax attributable to owners was $10.1 billion, compared to $12.4 billion in 2022, reflecting a decrease of approximately 18.55%[53] - The total dividend declared for 2023 was $7.1 billion, representing a payout ratio of 60%[56] - Corporate tax paid globally in 2023 was $4.6 billion, a decrease from $6.9 billion in 2022[119] - The company spent $20.8 billion with suppliers globally in 2023, down from $22.5 billion in 2022[125] - Total dividends declared to shareholders in 2023 amounted to $7.1 billion, down from $8.0 billion in 2022[123] Segment Performance - Iron ore segmental revenue increased to $32.2 billion from $30.9 billion in 2022, with underlying EBITDA rising to $20.0 billion[21] - Aluminium segmental revenue decreased to $12.3 billion from $14.1 billion in 2022, with underlying EBITDA dropping to $2.3 billion[21] - Copper segmental revenue remained stable at $6.7 billion, but EBITDA fell to $1.9 billion from $2.6 billion in 2022[25] Decarbonisation and Sustainability Initiatives - The company aims to decarbonise operations and support the transition to a low-carbon economy, focusing on sustainable practices and partnerships[23] - The company is targeting a 50% reduction in Scope 1 and 2 emissions by 2030 and aims for net zero by 2050[41] - The company has implemented a decarbonisation scorecard into its long-term incentive plan as part of its 2024 Remuneration Policy proposals[42] - The company is working with partners to decarbonise the steel value chain and has launched a hydrogen plant in Gladstone for lower-carbon alumina refining[43] - The company aims to reduce Scope 1 and 2 emissions by 50% relative to 2018 levels by 2030, with a total capital spend on decarbonisation estimated at $5-6 billion from 2022 to 2030[153] - In 2023, the company spent $425 million on decarbonisation, an increase from $299 million in 2022[164] - The company is developing BioIronTM technology, which has the potential to reduce CO2 emissions by more than 95% during steelmaking[96] Operational Developments - The company achieved a 5 million tonne production uplift in its Pilbara iron ore operations in 2023, with another 5 million tonnes expected in 2024[61] - The underground copper production at Oyu Tolgoi is on track to ramp up to 500,000 tonnes per annum from 2028 to 2036[61] - The company announced a $1.1 billion investment to expand its AP60 smelter, replacing the Arvida smelter[68] - The company plans to invest $6.2 billion in the Simandou high-grade iron ore project in Guinea, with production expected to ramp up to 60 million dry tonnes annually by 2025[172] - A pre-feasibility study for the Rhodes Ridge project in Western Australia has been approved with an investment of $77 million[172] - The company acquired a 50% equity stake in Matalco for $738 million, aiming to meet the growing demand for low-carbon products[172] - Production from the Oyu Tolgoi underground mine in Mongolia has commenced, positioning it as a significant copper producer[174] - A joint venture with First Quantum Minerals has been formed to develop the La Granja project in Peru, one of the largest undeveloped copper deposits[174] - The company is progressing a lithium carbonate starter plant at the Rincon lithium project, with production expected by the end of 2024[174] Social Responsibility and Community Engagement - The company spent A$725 million with Indigenous businesses in Australia in 2023, an increase from A$565 million in 2022[118] - The company’s voluntary social investment in 2023 was $84 million, up from $62.6 million in 2022[118] - The company anticipates supporting around 1,600 jobs through the construction of the Western Range mine, which started in 2023[128] Health and Safety - In 2023, the company achieved a 25% improvement in All-Injury Frequency Rate (AIFR) at Safe Production System (SPS) sites in the second half compared to the first half[105] - The all-injury frequency rate (AIFR) improved to 0.37 in 2023, down from 0.40 in 2022[178] - The company reported a year-on-year production uplift of 5 million tonnes at Pilbara iron ore sites, attributed to the implementation of SPS[105] Employee Engagement - The company’s employee satisfaction score (eSAT) increased to 74 in October 2023, up from 73 in 2022[114]