Rio Tinto raises dividend, sees ‘V-shaped’ China recovery

Rio Tinto (NYSE: RIO) said on Wednesday it saw a sharp V-shaped recovery in China as stimulus spurred industrial activity, helping its first-half profit handily beat market expectations.

“We believe that China has enjoyed a very steep V-shaped recovery,” CEO Jean-Sébastien Jacques said in a call.

“Today we see it as that the demand for steel and iron ore in China is very, very strong and order books are full,” Jacques said.

That rebound helped it report half-year underlying earnings of $4.75 billion, beating a consensus of $4.36 billion from 16 analysts compiled by Vuma.

The world’s largest iron ore miner declared an interim dividend of $2.5 billion, equivalent to $1.55 per share, up from $1.51 last year, and reconfirmed 2020 production guidance across all commodities.

Rio reported a net profit of $3.32 billion in the six months through June, down from $4.13 billion in the same period a year earlier.

The company’s iron-ore exports rose 1% in the three months through June and it continues to forecast annual shipments of between 324 million tonnes and 334 million tonnes.

“Big questions remain over the trajectory of consumer spending globally in the face of significant levels of unemployment,” Jacques said.

Rio said in its earnings statement that it had taken a $1 billion impairment charge, largely related to four of its aluminium smelters as well as its Diavik diamond mine in Canada.

High power prices forced Rio to close its New Zealand smelter this year and to ask Icelandic regulators to address what it called discriminatory power pricing for its ISAL smelter.

Its Australian aluminium businesses remain under review.

Free cash flow tumbled 28% as the miner spent more on development projects and tax payments, but analysts at Jefferies remained upbeat about its prospects.

Higher metal prices and relatively stable unit costs should help free cash flow improve sequentially in the second half, they said, and suggested Rio could pay a special dividend with its full-year results.

“We have continued to pay the same level of taxes, same level of employment, the same dividend,” Chief Financial Officer Jakob Stausholm told Reuters.

“But for a special dividend, it’s better to wait a moment to make such considerations.”

The company said is working with partners to “reduce capital intensity, lower operating costs and shorten the timetable for development” of the high-grade Simandou iron ore project in Guinea. Fieldwork involving geotechnical investigation and surveying will start in Guinea this half.

Jacques said he will front an Australian Senate enquiry next week over Rio’s destruction of two sacred caves of historic significance in Western Australia.

China Austenitic Manganese Steel Castings Standard

This standard is used for casting kinds of austenitic manganese steel casting parts.

1.Austenitic Manganese Steel Castings Grades And Chemical Composition

2.Austenitic Manganese Steel Castings Heat Treatment

When casting parts thickness less than 45 mm and carbon content more than 0.8%, ZG90Mn14Mo1 casting parts no need heat treatment; When casting thickness more than 45mm or carbon content more than 0.8%, all grades need water toughening treatment. All casting parts need uniform heating and insulation, water toughening treatment temperature need more than 1040℃, casting parts need put into water-poor quality, and water-poor temperature can not more than 50 ℃

3.Austenitic Manganese Steel Castings Hardness

Except for customer inquiry, the manganese steel casting parts hardness not more than 300 HBW.

4.Austenitic Manganese Steel Castings Surface Quality

• Casting parts are not allowed to have casting defects such as cracks and slag inclusions, sand inclusions, cold insulation, pores, shrinkage holes, shrinkage, and lack of meat that affect the performance.
• Casting parts gates, risers, burrs, and sticky sand should be cleaned. The grinding residues of the gates and risers should meet the requirements of both suppliers and demanders.
• The surface roughness of casting parts should be implemented in accordance with GB / T 6060.1

5.Austenitic Manganese Steel Castings Welding Repair

• Welding repair of casting parts defects is allowed. The defective parts of the casting parts must be cleaned before welding repair. After welding repair, the use and appearance quality of the casting parts should not be affected.
• The depth of the groove prepared for the welding repair surface of the casting exceeds 40% or 25mm of the wall thickness, which is considered as a major welding repair.
• Major welding repairs must be agreed in advance by the buyer. For major welding repairs, there should be a record of the location and extent of the welding repairs.

6.Austenitic Manganese Steel Castings Cleaning

The removal of gates, risers and vents can be accomplished in a few different ways for manganese steel castings. If the castings are allowed to cool to room temperature after shakeout, most of the rigging can be broken or flogged off of the casting. The casting will be fairly brittle at this point and removal of these items with an impact force can be quite effective. Once heat-treated, however, it will no longer be possible to break anything of size off of the casting. Cutting will be required to remove the rigging from the casting once it has been heat-treated. This can be accomplished by abrasive cutting, torch cutting, or arc air gouging. Torch cutting is somewhat difficult and produces high volumes of smoke, due to the high alloy content of manganese steels. It is typical to use torch tip sizes that are much larger than what is needed for carbon steel. Properly designed dust and smoke collection systems are required when using hot methods to cut manganese steels. Care must also be taken not to overheat the manganese steel when doing hot work. Fast cuts and moving around the casting to avoid concentrating the heat are advisable in order to minimize the damaging effect of overheating.

7. Austenitic Manganese Steel Castings Machining

Manganese steel’s unique wear-resistant properties also make it very difficult to machine, at best. In the early days of manganese steel production, it was thought to be unmachineable and grinding was used to shape the parts. Now with modern cutting tools, it is possible to turn, bore and mill manganese steels. Manganese steel does not machine-like other steels and typically requires tools that are made with a negative rake angle. In addition, relatively low surface speeds with large depths of cut produce the best results. This arrangement produces high cutting forces and the equipment and tooling must be robust to withstand these forces. Any chatter of the tooling can add to the work hardening of the surface being machined. Most cutting is typically done without any sort of lubrication. During the machining of manganese, it is important to continuously remove the work-hardened zone with the next cut. Small finishing cuts or tool chatter will cause the hardness to build and make the remaining surface virtually unmachineable.

Drilling of manganese steels, while possible, is very difficult and required holes should be cast into the part versus drilled. If drilled holes are required, mild steel inserts are often cast into the part so that the machineable insert can be drilled or drilled and tapped.

@Nick Sun     NICK@XZHUAGANG.COM