Rio Tinto announced its best ever annual profit and a record full-year dividend of $16.8 billion, boosted by higher iron ore prices and strong demand from top consumer China.

The company reported underlying earnings of $21.38 billion for the year ended Dec. 31, up 72 percent from a year earlier. Reuters reported that analysts had expected underlying earnings of $21.63 billion, according to Visible Alpha.

“Our balance sheet is the strongest it’s been for at least 15 years,” Chief Executive Jakob Stausholm told reporters after the results.

The news comes after a challenging year for Rio Tinto that earlier released the findings from an internal report that uncovered poor workplace culture. Rio Tinto was also dealt a setback when Serbia shut down a proposed lithium project.

On the plus side, it resolved a long-running dispute at the Oyu Tolgoi copper-gold mining project in Mongolia.

"Our people have continued to safely run our world-class assets and are working hard to improve our operational performance, despite challenging operating conditions from prolonged COVID-19 disruptions. The recovery of the global economy, driven by industrial production, resulted in significant price strength for our major commodities, which we were able to capture, achieving record financial results with free cash flow of $17.7 billion and underlying earnings of $21.4 billion, after taxes and government royalties of $13 billion. This enables us to pay our highest total dividend ever of 1,040 US cents per share, including a 247 US cents per share special dividend, representing a 79 percent payout,” Stausholm said in a statement.

"With the launch of our new strategy, we have set a new direction for Rio Tinto to thrive in a decarbonizing world. We have a portfolio that is well-positioned, and are targeting disciplined investment in commodities that will see strong demand in the coming decades. Our agenda is an ambitious, multi-year journey which we are determined to deliver and we have already taken the first steps, with underground operations under way following the Oyu Tolgoi agreement and a binding agreement to acquire the Rincon lithium project in Argentina,” Stausholm continued. “We continue to evolve and deepen the way we engage and interact with all stakeholders as we work hard to generate and strengthen relationships wherever we operate. Our actions will ensure we continue to deliver attractive returns to shareholders, invest in sustaining and growing our portfolio, and make a broader contribution to society, particularly in relation to the drive to net-zero carbon emissions."

In its statement, Rio Tinto said safety remains the top priority and noted that it had operated fatality-free for a third successive year. “The all-injury frequency rate deteriorated slightly to 0.40: fatigue, labor shortages and other pressures from COVID-19 have heightened the safety risk in day-to-day operations and we recognize that there is no room for complacency.”

In the results statement, Rio Tinto said it was committed to exploring all options in Serbia, which shut down its $2.4-billion Jadar lithium project.
It was "reviewing the legal basis of the decision", it added, and the implications for its activities in Serbia.