Rio Tinto (LSE: RIO) shares dropped 1.8% at the open on Thursday as the global miner reported a 26% fall in 2023 pretax profit to $13.79 billion and cautioned investors that cost inflation will persist at its key iron ore business in 2024.
The mining giant, which produces iron ore, copper and aluminium, said full-year revenue declined 2.7% to $54.04 billion while its dividend payout was cut 12% to 435.00 cents per share.
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Although Rio Tinto lifted production of copper by over 3% last year, it warned that cash operating costs at its Pilbara iron ore operations are set to rise to $21.75-23.50 per wet metric tonne in 2024, up from $21.50 last year.
“2024 guidance for Pilbara unit cash costs reflects the increased work effort in the mines and persistent labour and parts inflation in Western Australia,” the London-based company said.
Rio Tinto shares have fallen 7.8% since the start of 2024.
