MONTREAL – After years of challenges, Rio Tinto’s aluminum division proved to be the mining giant’s best performer in 2014.
Underlying profits at the Montreal-based operations soared 124 per cent to US$1.25 billion, dramatically outpacing iron ore, copper, diamonds and energy, the company said Thursday.
Rio Tinto (NYSE:RIO) attributed the improvement to continuing cost reductions, productivity improvements, higher prices for valued-added products and weaker currency in Canada and Australia.
Aluminum was one of the few metals to see a price increase last year. On the London Metal Exchange, aluminum averaged US$1,867 per tonne in 2014, up one per cent.
Rio Tinto said value-added products, which represent 62 per cent of metal produced, allowed it to realize US$2,395 per tonne. Overall, the company’s underlying profits decreased nine per cent to US$9.3 billion, including a US$4.2-billion hit from lower metal prices, offsetting currency gains.
Sales declined 6.8 per cent to US$47.7 billion.
Iron ore remained by far the most important division, accounting for 87 per cent of Rio’s profits. However, a halving of iron ore prices caused profits to fall 18 per cent despite record production volumes.
Iron Ore Company of Canada earnings decreased to US$144 million from US$305 million in 2013 on a 24 per cent drop in sales.
“Our continued financial and operating discipline enabled us to offset much of the impact of lower commodity prices in 2014,” CEO Sam Walsh said.
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