Iron  ore  accounted  for  77%  of  Rio Tinto's total underlying earnings in 2016, as the mining 

giant  returned  to  profitability  in  the  second-half  of  the  year  on a recovery in commodity 

prices. 

In 2016, Rio Tinto's iron ore division contributed underlying  earnings of $4.61 billion -- up 17

% year  on year -- to total earnings of $6.06 billion. The miner attributed  the improvement to 

a 6% year-on-year rise in the average Platts 62% index in 2016, lower production costs, and 

stronger sales. 

Iron ore was also the strongest performer in terms of EBITDA margin, with sales from Wester

n Australia achieving a margin of 63% on an FOB basis. 

Speaking to the media Wednesday, Rio Tinto's chief executive, JS Jacques, said the compan

y was  unconcerned  by any slowdown in China and expected Beijing to continue to stimulate 

the economy. 

Jacques  said  he  would  not  be  drawn  on  a  price outlook for iron ore, but highlighted key 

drivers that would be supportive of prices, which included the health of the Chinese economy 

and the government's move to push out inefficient and polluting steel capacities. 

"This  would  be  an opportunity for us, as there will be a switch from low-grade to high-grade 

iron ore," he said.