Rio Tinto (LSE: RIO) announced that it would be lowering its dividend for 2022, with a final dividend of $2.25 per share, down from $4.17 a year earlier, which resulted in a total dividend of $4.92, marginally above market expectations. The mining giant says it has cut divedends due to a sharp drop in Iron Ore prices.

For 2022, Rio Tinto reported a pre-tax profit of $18.66bn, a decrease of 39% from the previous year. The fall in profit was due to a decline in commodity prices, particularly iron ore, and inflation rates on operating costs and closure liabilities. Revenue dropped to $55.55bn, 12% lower than $63.50bn in 2021, but marginally above JPMorgan analyst expectations of $52.49bn.

Across its product suite, the company earned an average iron ore price of $97.6 per wet metric tonne, compared to $132.3 per tonne the previous year. This equates to $106.1 per dry metric tonne, down from $143.8 per dry metric tonne. Iron ore portside sales in China were reported at 24.3 million tonnes in 2022, down from 14.0 million tonnes in 2021.

Despite these challenging conditions, Rio Tinto remains resilient due to the quality of its assets, its people, and the strength of its balance sheet. The company's operational performance has improved, with several records being set at its Pilbara Iron Ore mine and rail system. Furthermore, it is investing in the future by doubling its stake in the Oyu Tolgoi copper-gold project in Mongolia, progressing the Rincon Lithium Project in Argentina, and reaching agreements that ensure the Pilbara iron ore business's long-term success.

For 2023, Rio Tinto lowered its capital investments guidance to $8bn from a prior estimate of between $8bn and $9bn. However, it raised its estimates for 2024 and 2025 to between $9bn and $10bn.

Rio Tinto shares closed 0.5% lower in Sydney at A$125.51 and rose 1.1% to 6,270.00 pence in London.