This earnings season, major mining companies are distributing their lowest dividends in recent years. Falling mineral prices and the need to hold cash to invest in large development projects have pushed companies to cut dividend payments. Rio Tinto, Anglo American, and Glencore are all reporting declines in their half-year earnings, and BHP is expected to follow a similar trend.
The mining giants, who have enjoyed high profits for years thanks to strong profits from China and supply shortages linked to COVID-19 and Russia, are now facing challenges such as lower profits, high capital expenditures, and restructuring.
This situation limits the dividends that companies can return to their shareholders.While iron ore and coal prices have fallen by 13% since the beginning of the year, miners are opting to invest more in copper projects to offset these losses. However, copper, despite having increased by 8% this year, still holds a small share in their portfolios.
Brenton Saunders, portfolio manager at Pendal Group, notes that mining companies have long been in their most capital-intensive phase and that this is unlikely to change in the near term. Unless there is an increase in commodity prices, dividends are expected to remain low.
BHP’s $7.4 billion investment in its Jansen potash mine project in Canada stands out as one of the largest investment expenditures this year. Rio Tinto plans to spend $13 billion over the next three years to renovate its depleted mines in Western Australia.
Anglo American continues to sell its coal and diamond divisions, while Glencore is negatively impacted by low coal prices.Glencore announced that its earnings fell by 14% in the first half, and its net debt increased due to lower coal prices and lower copper production. The company did not change its dividend and did not announce any additional share buybacks.
The dividend remained at $0.05 per share, its lowest level since 2021.Rio Tinto reported its lowest half-year profit and lowest interim dividend since 2020, due to falling iron ore prices and rising costs in Australia. Anglo American reported a loss of $1.9 billion in the first half of 2025, reduced its dividend to its lowest level in five years, and stated that restructuring efforts are ongoing.
