THE world’s largest mining companies are delivering their smallest shareholder payouts in years as declining mineral prices and massive capital expenditure requirements force cash conservation efforts across the sector, said Reuters on Thursday.
Rio Tinto, Anglo American and Glencore have all reported reduced first-half earnings, with BHP expected to continue the downward trend when releasing results on August 19, the newswire said. The companies are operating amid lower profitability following years of strong China-driven gains supported by pandemic and Russia-related supply disruptions.
Key commodity prices have weakened significantly, with iron ore and coal dropping approximately 13% since January. While miners are increasing investments in copper projects, buoyed by 8% price gains on energy transition demand, these developments remain too small to offset broader portfolio losses.
The mining majors are entering their most capital-intensive development phase in years, constraining dividend capacity. BHP’s Jansen potash project in Canada now requires up to $7.4bn for initial development, up from a previous $5.7bn estimate. Rio Tinto plans over $13bn in iron ore mine investments over three years to replace depleted Western Australian operations.
Glencore reported a 14% earnings decline due to weaker coal prices and reduced copper output, maintaining its dividend at $0.05 per share – the lowest since 2021. Rio Tinto posted its smallest first-half profit since 2020 and lowest interim dividend in seven years, said Reuters. Anglo American recorded a $1.9bn loss while cutting dividends to five-year lows amid ongoing restructuring.
Analysts project BHP’s full-year payout at $1.02, representing an eight-year low. Brenton Saunders, a portfolio manager at Pendal Group in Sydney, said that without commodity price recovery, dividend payments will likely remain subdued.
