As of now, Rio Tinto, Vale.FMG and other major mining companies like BHP Billiton have released their operating results for 2022. Due to rising costs and a significant decline in iron ore prices, the performance of the four major mining giants has notably dropped from the high levels of 2021, with profit declines exceeding 40%. However, when compared to the entire Chinese steel industry, the total profit level of China's steel sector still falls short of just a fraction of the profits of the four major mines.
Global iron ore prices haveIn 2021, we achieved a historic high, exceeding $230 per ton. However, in 2022, iron ore prices saw a significant decline, fluctuating between $80 and $160 per ton, yet remained relatively high overall.
Rio Tinto:In 2022, the EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was $26.3 billion, a 30% decrease from 2021. Net profit reached $12.4 billion, a 41% decline year-over-year from 2021, yet still showing a 27% increase compared to 2020.
Vale:In 2022, EBITDA reached $20.9 billion, a decrease of 38% year-on-year, with the company attributing this primarily to the 23.6% decline in the actual price of iron ore fines; Operating Free Cash Flow was $5.7 billion, down from $20 billion in the same period of 2021, due to the decrease in EBITDA.
BHP Billiton:The Q1 2023 financial report (covering the six months ending December 2022) reveals that during the reporting period, the company's revenue decreased by 16% to $25.71 billion, with net profit falling 32% from the previous year's $9.4 billion to $6.46 billion.
FMG achieved a pre-tax, depreciation, and amortization (EBITDA) of $4.4 billion in the first half of the 2022-2023 fiscal year (ending December 2022), marking a 9% decrease year-on-year.
In comparison,In 2022, China's steel industry reported operating revenue of 8.7147 trillion yuan, a decrease of 9.8% year-on-year; operating costs were 8.3221.4 trillion yuan, down 6%; and the total profit was 36.55 billion yuan, a decrease of 91.3% year-on-year.
Thus,In 2022, the total profit of China's steel industry was less than a fraction of the profits of the four major mines. The net profit of Rio Tinto alone, when converted to RMB, reached 85.6 billion yuan, nearly three times the total profit of the entire steel industry in China. If calculated based on EBITDA (earnings before interest, taxes, depreciation, and amortization), it is even six times higher.
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