Rio Tinto PLC on Friday sounded a cautious note on the global economic outlook, even as it reported a lift in shipments of its flagship product iron ore, the main ingredient in steel. The Anglo-Australian mining company
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highlighted concerns about a growing risk of a recession, and said the trade disruptions, food protectionism and energy crisis squeezing supply chains will need to ease significantly before inflation pressures subside.
“The economic outlook is weakening due to the Russia-Ukraine war, tighter monetary policy to curb rising inflation, and targeted Covid-19 restrictions in China,” said Rio Tinto, the world’s second largest mining company. Higher rates of inflation have increased the miner’s closure liabilities, it said. Rio Tinto estimated a roughly US$400 million pretax hit to underlying earnings in its first fiscal half. Faced with falling commodity prices, Chief Executive Jakob Stausholm sought to reassure investors on the miner’s strategy. “We are determined to further strengthen Rio Tinto while investing to grow in the commodities needed for the energy transition, decarbonize our portfolio, be a partner and employer of choice, maintain our tight capital allocation and continue to pay attractive dividends,” …