Rio Tinto cheers investors with share buy-back plan and higher dividend

'Reinvigorated': Rio Tinto has returned to good form after a $40 billion mountain of debt

11 April 2012

London-listed Rio Tinto gave its investors something to celebrate today, when the "reinvigorated" mining giant announced a

Rocketing commodity prices, strong demand from China's steel mills and running many of its operations at full capacity helped Rio post a $14.3 billion net profit for 2010, nearly triple the previous year's $4.9 billion.

The miner announced a final dividend of 63 cents, taking total dividends for the year to 108 cents per share - more than double last year's pay-out - and said it would return $5 billion to shareholders through a buy-back programme by the end of 2012.

Chief executive Tom Albanese said: "Rio Tinto is reinvigorated, running strongly and benefiting from favourable markets."

Glyn Lawcock, mining analyst at UBS, said: "Rio has surprised people on the upside with the dividend and the buyback."

Rio is also extending its $3.9 billion takeover offer for coal miner Riversdale Mining by two weeks to March 4, amid signs Riversdale's second-biggest shareholder is holding up the deal.

The investor, Brazilian steel-maker CSN, today raised its stake to 19.9%.

However, analysts said that was probably to help beef up its boardroom power rather than for a counter-bid.