Rio Tinto reported solid 2025 results with an 8% increase in copper equivalent production and disciplined cost management, driving a 9% rise in underlying EBITDA to $25.4 billion. The company marked major project completions and maintained a strong dividend payout.
- 8% increase in copper equivalent production
- 9% rise in underlying EBITDA to $25.4 billion
- Completion of Oyu Tolgoi underground mine and first Simandou ore shipment
- Maintained 60% dividend payout ratio with $6.5 billion ordinary dividend
- Strong operational discipline and sustainability progress with 14% CO2 reduction
Solid Operational Performance and Financial Strength
Rio Tinto closed 2025 with robust financial results, underpinned by an 8% increase in copper equivalent production and disciplined cost control. The company’s underlying EBITDA rose 9% to US$25.4 billion, reflecting operational excellence across its diversified portfolio, including record iron ore output from Pilbara and a significant ramp-up at the Oyu Tolgoi copper mine in Mongolia.
Despite challenges such as cyclone disruptions in the Pilbara and a tragic fatality at the Simandou project, Rio Tinto maintained a strong focus on safety and operational discipline. CEO Simon Trott emphasised the company’s commitment to learning from the incident and supporting the team on the ground as investigations continue.
Key Project Milestones Drive Growth Outlook
2025 saw the completion of the Oyu Tolgoi underground development, positioning the mine to reach an average of around 500,000 tonnes of copper annually from 2028. The Simandou iron ore project achieved its first ore shipment in December, marking a major step in what is expected to become a world-class high-grade iron ore operation. Additionally, the Western Range iron ore mine opened on time and on budget, with several other Pilbara replacement mines progressing well.
Rio Tinto also completed the acquisition of Arcadium Lithium, accelerating its lithium growth strategy with projects in Argentina and Canada. The company targets 200,000 tonnes per annum lithium carbonate equivalent capacity by 2028, reflecting its commitment to battery metals amid the energy transition.
Financial Discipline and Shareholder Returns
The company generated US$16.8 billion in operating cash flow and sustained a 60% payout ratio, delivering a US$6.5 billion ordinary dividend; the tenth consecutive year at the top end of its dividend range. While net debt increased to US$14.4 billion, largely due to the Arcadium acquisition, Rio Tinto’s balance sheet remains strong with a net gearing ratio of 18% and ample liquidity.
Cost discipline remains a priority, with a 5% reduction in operating unit costs in real terms and productivity benefits of US$650 million annualised by early 2026. Rio Tinto is also advancing sustainability goals, reporting a 14% reduction in Scope 1 and 2 CO2 emissions since 2018, although it acknowledges that meeting its 2030 target depends on third-party project delivery and ongoing negotiations.
Navigating Challenges and Future Outlook
Rio Tinto faces ongoing challenges, including a tax dispute with the Mongolian government related to Oyu Tolgoi, with assessments amounting to approximately US$440 million. The company is actively engaging with authorities to resolve the matter. Meanwhile, ramp-ups at Simandou and lithium projects remain subject to regulatory approvals and market conditions.
Looking ahead, Rio Tinto’s 2026 guidance aligns with its Capital Markets Day forecasts, with steady iron ore sales, copper production between 800,000 and 870,000 tonnes, and continued capital investment of up to US$11 billion. The company’s strategic focus on operational excellence, project execution, and capital discipline positions it well to extend growth into the next decade.
Bottom Line?
Rio Tinto’s strong 2025 results and project progress set the stage for sustained growth, but investors will watch closely for resolution of regulatory and safety challenges.
Questions in the middle?
- How will the Mongolian tax dispute impact Oyu Tolgoi’s future earnings and government relations?
- What are the implications of the Simandou fatality investigation on project timelines and safety protocols?
- Can Rio Tinto maintain its dividend payout amid rising net debt and ongoing capital investments?