Rio Tinto lifts first-half profit to record $841M

Demand from China was a bright spot in the Rio Tinto result

By staff and wire reports

SYDNEY, Australia (CNN) -- Anglo-Australian resources giant Rio Tinto lifted its first-half earnings 24 percent to a record $841 million, the company said Thursday.

Rio Tinto chairman Sir Robert Wilson called the result for the half year to June 30 "satisfactory against the background of a weak economic environment".

He warned that the economic outlook "is still deteriorating and we have to expect a testing time ahead."

Rio Tinto's turnover for the six months was up 16 percent to $5.28 billion. This compares with full-year sales of $9.97 billion in 2000, when net profit was just over $1.5 billion.

China a bright spot

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The Rio Tinto chairman said the U.S. slowdown was accompanied by relatively soft markets in Europe and Japan. But China was a "geographic bright spot".

He said there was little on the horizon to be optimistic about, in terms of metals demand in the U.S. this year or in the first half of 2002.

The diversified resources group, which is dual-listed in Australia and the U.K. following a merger in 1995, operates across six broad divisions: iron ore, copper, aluminium, industrial minerals, energy, and diamonds & gold.

The iron ore group delivered the highest profit, of $229 million, up 62 percent and equal to 27 percent of Rio Tinto's total net earnings.

Demand for iron ore still firm

Wilson said that while there was moderate weakness across most of the company's business, demand for iron ore remained firm, and coal was also buoyant.

He said the decline of the Australian dollar against the U.S. dollar had eased the impact of weak prices.

Rio Tinto is one of the biggest stocks on the Australian market. It closed Thursday at Aust. $33.80, a gain of 37 cents for the day.