Once again relying on copper to turn the tide! Rio Tinto's net profit declines, iron ore faces pressure, and copper business surges

On February 18th, local time, global mining giant Rio Tinto released its 2025 annual financial report. The report shows that driven by strong growth in copper and aluminum businesses, Rio Tinto’s full-year core profit remained stable, offsetting the negative impact of falling iron ore prices. However, the company also faces significant challenges due to declining net profit, rising debt levels, and recent safety incidents at the Simandou iron ore project in West Africa.

Located in Perth, Australia, Rio Tinto Group. Visual China, File Photo

According to the financial data, Rio Tinto achieved consolidated sales revenue of $57.6 billion in fiscal year 2025, a 7% increase year-over-year; EBITDA before interest, taxes, depreciation, and amortization reached $25.4 billion, up 9%, roughly in line with market expectations. However, net profit declined significantly to $9.97 billion, a 14% decrease year-over-year.

Despite the drop in net profit, Rio Tinto announced a final dividend of $2.54 per share, bringing the total annual dividend to $4.02, unchanged from 2024, representing 60% of underlying earnings, continuing the company’s nine-year commitment to a payout ratio of 40%–60%.

The company reported revenue of $57.64 billion in 2025, a 7.4% increase; net profit was $9.97 billion, down 14%; underlying earnings reached $10.87 billion, flat compared to the previous year, slightly below market expectations of $11.03 billion.

Looking at business segments, iron ore remains Rio Tinto’s largest profit source. Pilbara iron ore production remained stable at 327.3 million tons, but due to changes in global market demand and a 6% price decline, the segment’s EBITDA decreased by 11% year-over-year to $15.2 billion, indicating clear market softness.

Of course, as a major mining company, Rio Tinto is not unprepared. Its diversified strategy, actively promoted in recent years, is part of its response. Similar to other mining giants, copper is becoming a new growth engine. In 2025, Rio Tinto’s copper production set a record for the year, reaching 883,000 tons, an 11% increase year-over-year. Benefiting from higher output and a 9% increase in copper prices, the company’s copper EBITDA surged by 114% year-over-year to a record $7.4 billion.

Meanwhile, Rio Tinto’s aluminum business also performed steadily, with production up 3% to 3.4 million tons, and EBITDA increasing by 20% to $4.4 billion.

“With disciplined capital allocation and top-tier project execution capabilities, we continue to increase investments in industry-leading, value-enhancing growth projects,” said Simon Trott, CEO of Rio Tinto. He emphasized that the company remains on track to achieve its goal of a 3% compound annual growth rate in copper equivalent production by 2030. Trott highlighted that, leveraging a high-quality project pipeline centered on copper, Rio Tinto has a clear plan to extend this growth trend into the next decade.

At the December 2025 Capital Markets Day, Trott also introduced a “stronger, clearer, simpler” strategic framework, focusing on the core businesses of iron ore, copper, aluminum, and lithium. The company plans to divest non-core assets, including its titanium dioxide and borates businesses, to free up $5 billion to $10 billion in capital, strengthening its balance sheet and supporting investments in key growth areas.

Indeed, Rio Tinto is currently experiencing the pains and risks associated with strategic transformation. Its net debt in 2025 surged to $14.4 billion from $5.5 billion the previous year, a 162% increase. This spike was mainly driven by large-scale capital investments, including $2.2 billion in capital expenditure and equity investments in the Simandou project in Guinea, West Africa.

Additionally, it is worth noting that Rio Tinto has recently come under public scrutiny again due to safety incidents at the Simandou iron ore project. On February 15th, local time, Rio Tinto issued a statement on its website regarding an accident at the Simandou mine’s SimFer area, where a contractor tragically lost their life. The company also stated that work and activities at the site have been suspended, and support, including counseling, is being provided to affected team members.

Public disclosures show that since 2023, multiple fatal accidents have occurred at the Simandou project, raising widespread questions about safety management systems. Trott recently stated, “Safety is always our top priority. We deeply regret the unfortunate death of a colleague at the Simandou project last weekend and solemnly commit to learning profound lessons from this incident.” Trott plans to visit the SimFer mine site to conduct a comprehensive investigation into the causes of the incident.