A sweeping productivity overhaul is beginning to reshape Rio Tinto, with the mining giant reporting that $870 million in cost and volume benefits had been banked in the first six months of 2026, and unveiling plans to almost triple the annual run rate to $1.8 billion by year-end.<\/p>\n
\u201cThis has been a strong half with real momentum building month on month,\u201d Chief Executive Simon Trott told investors at the half-year results presentation. \u201cWe\u2019re running our assets harder and smarter, moving fast, changing how we work. Today it\u2019s showing through in the numbers.\u201d<\/p>\n
Trott, who took the helm in late 2025, said the productivity drive is not a top-down budget squeeze but a structural change involving more than 80 large initiatives across the company. \u201cThis is about the people closest to the work finding better ways of doing it. This is the culture of excellence I want to embed at Rio, codified through our new management operating system.\u201d<\/p>\n
The results were powered by both favorable commodity markets and internal improvements. Underlying EBITDA rose 28% to $14.8 billion, with stronger copper and aluminium prices contributing $3.6 billion in additional earnings. That more than offset $1.5 billion in external headwinds from currencies, inflation and market-driven cost pressures.<\/p>\n
Financial snapshot<\/p>\n
MetricH1 2026H1 2025ChangeUnderlying EBITDA$14.8B~$11.6B+28%Free Cash FlowNot disclosedNot disclosed+75%Interim Dividend$3.4B~$2.4B+43%Productivity Benefits Banked$870M\u2013New program<\/p>\n
Free cash flow climbed 75%, despite $5 billion in capital expenditure and payment of the $4.2 billion 2025 final dividend. Net debt was reduced during the period, and the board declared a 50% payout ratio for the interim dividend, a 43% increase in absolute terms to $3.4 billion.<\/p>\n
Copper: the standout<\/p>\n
Copper emerged as the group\u2019s most important earnings driver, with EBITDA up 84% and free cash flow more than trebling. The Oyu Tolgoi underground mine in Mongolia continued to ramp up, hitting record production, while the company reiterated its target of 1 million tons of copper by 2030. Trott noted that redesigning underground development at Oyu Tolgoi, harnessing data and accelerating drawbell construction, had already delivered about $80 million in productivity improvements.<\/p>\n
However, the Kennecott mine in Utah faced challenges. A geotechnical program and a furnace breach in late June will push some metal sales and cash flows into 2027. CFO Peter Cunningham said that \u201cmining performance at Kennecott is expected to recover in the second half,\u201d but the remediation work will delay certain deliveries. Separately, a life-extension study for Kennecott is progressing and is expected to move toward a final investment decision in the near term, potentially extending the mine\u2019s life into the 2040s.<\/p>\n
Iron ore: highest first-half output since 2018<\/p>\n
Pilbara operations delivered their highest first-half production since 2018, underpinned by improvements in system flow from mine to port. Trott highlighted that the team had parked about 80 pieces of redundant equipment, improving safety and generating roughly $55 million in annual benefits. Unit costs remained on track for full-year guidance, with productivity gains offsetting exchange rate and diesel price headwinds.<\/p>\n
On the growth front, the massive Simandou iron ore project in Guinea is now more than 75% complete and on track for first production by the end of 2027. The company is building inventory across the system, and the project is seen as a key source of future volume growth. Looking further ahead, the feasibility study for Rhodes Ridge \u2013 a high-grade deposit \u2013 is on schedule, with first phase output expected by 2030.<\/p>\n
Aluminium and lithium: portfolio diversification pays off<\/p>\n
Aluminium EBITDA rose 31%, supported by strong smelter performance and higher prices. Commercial teams navigated an evolving tariff environment, including US Section 232 measures, with what Trott described as a \u201crelatively modest\u201d impact on the business. He reaffirmed that Rio had no intention of selling core aluminium assets as part of its simplification drive. \u201cWe\u2019ve got the best aluminium assets in our view, in the industry,\u201d Trott said. \u201cThe question for us is how do we further strengthen and build on it.\u201d<\/p>\n
Lithium markets continued to improve, driven by demand from battery energy storage systems. The company delivered the F\u00e9nix 1B and Sal de Vida projects ahead of schedule and is on track with the Rincon expansion, targeting 200,000 tons of lithium capacity by 2028.<\/p>\n
Strategy and capital discipline<\/p>\n
Trott underscored that nearly 60% of EBITDA now comes from copper, aluminium and lithium \u2013 commodities that feed electrification, artificial intelligence and traditional urbanization. \u201cUp to 60% of the value of raw materials in an electric vehicle comes from our commodities,\u201d he said. \u201cUp to 70% of the value of materials that goes into a data center comes from our commodities.\u201d<\/p>\n
Capital expenditure guidance remained unchanged at up to $11 billion for both 2026 and 2027, with sustaining capital stable at about $4 billion a year. From 2028, total capex is expected to decline to around $10 billion in real 2025 terms. The company is also progressing a $5 billion asset divestment program for 2026, part of a broader pipeline exceeding $10 billion to unlock capital for growth and shareholder returns.<\/p>\n
Cunningham reiterated the group\u2019s long-term targets: a 3% compound annual growth rate in copper equivalent production to 2030 and a 4% CAGR reduction in unit costs. The balance sheet remains strong with a single-A credit rating, and the company has a 10-year track record of paying around 60% of underlying earnings to shareholders.<\/p>\n
Analysts press on sustainability of the productivity surge<\/p>\n
The Q&A session revealed some skepticism about whether the rapid productivity gains could be maintained. Barrenjoey analyst Glyn Lawcock asked directly: \u201cCan that momentum be sustained \u2013 another $1.2 billion the following year or does it start to get harder?\u201d<\/p>\n
Trott acknowledged that early wins are easier but argued the cultural shift would generate ongoing benefits. \u201cIf you embed it in the way people work and you embed it in the culture, then I\u2019ve no doubt that our people, and we\u2019ve got fantastic people across the business, they\u2019ll find better ways of doing things. We just need to take the barriers out of the way.\u201d<\/p>\n
On the performance gap between the $870 million banked and the $1.8 billion run rate, Peter Cunningham clarified that the split between cost reduction and volume improvements is similar to the half-year profile, with about $530 million from costs and the remainder from volumes. Some transition costs are expected as the initiatives roll out.<\/p>\n
When asked about potential inorganic moves to bolster copper supply beyond 2030, Trott was unequivocal: \u201cTier 1 assets provide optionality\u2026 Inorganic moves are not necessary. The focus needs to fairly and squarely be on continuing that ramp up\u201d at Oyu Tolgoi.<\/p>\n
The Resolution copper project in Arizona also drew interest. Trott said drilling rigs are now on site and the next catalyst will be characterization of the ore body. He confirmed that building a smelter remains one of the options under study, alongside the possibility of using the existing Kennecott smelter.<\/p>\n
Looking ahead, Trott struck a confident tone: \u201cI am single-minded about continuing to deliver returns and growth because that is how we will become the most valued metals and mining business.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"A sweeping productivity overhaul is beginning to reshape Rio Tinto, with the mining giant reporting that $870 million…\n","protected":false},"author":2,"featured_media":92510,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[20718],"tags":[24840,21219,39448,21997,39447,39446,39449,21021,24122,12991,36797,24903],"class_list":["post-92509","post","type-post","status-publish","format-standard","has-post-thumbnail","category-rio-tinto","tag-aluminium","tag-copper","tag-kennecott-mine","tag-lithium","tag-oyu-tolgoi-mine","tag-peter-cunningham","tag-pilbara-operations","tag-resolution-copper","tag-rhodes-ridge","tag-rio-tinto","tag-simandou-project","tag-simon-trott"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@UnitedKingdom\/117001271762807381","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/92509","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/comments?post=92509"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/92509\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media\/92510"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media?parent=92509"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/categories?post=92509"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/tags?post=92509"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}