Rio Tinto’s takes $1.2b hit on Labor’s carbon plan
Rio Tinto has wiped $1.22 billion off the value of its Australian alumina refineries to account for the cost of the Albanese government’s new carbon policy as lower commodity prices drove a 43 per cent slump in half-year earnings.
Lower prices for iron ore, copper and aluminium over the past six months drove Rio’s underlying half-year profit to a weaker than expected $US5.7 billion ($8.4 billion).
Rio Tinto CEO Jakob Stausholm at the London Stock Exchange Group headquarters in London on July 26. Hollie Adams
The miner will pay $US1.77 per share in half-year dividends; a sum that was also lower than expected but still the third-highest interim dividend in Rio’s 150-year history.
Net earnings slumped to $US5.11 billion after the alumina impairments were recognised, and Rio said the introduction of Australia’s “safeguards mechanism” carbon reduction policy on July 1 was the “trigger” to review the value of its two energy-intensive refineries in Queensland.
Energy minister Chris Bowen chose Rio’s Yarwun alumina refinery – which was written down to zero in Wednesday’s accounts – as the place to launch the major details of the “safeguards mechanism” policy in January.
Rio had sought and won special allowances under the carbon policy, which requires the 215 biggest emitters to cut greenhouse gas emissions by an annual average of 4.9 per cent until 2030.
Despite the special allowances to reflect the trade-exposed nature of the refineries, Rio said the cost of building decarbonisation technology and buying carbon offsets had decreased the book value of the two refineries by a combined $US828 million after tax.
Rio chief executive Jakob Stausholm has put decarbonisation at the centre of the company’s strategy over the past two
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