Rio Tinto splashes record dividend and calls for common ground in trade stoush

RIO TINTO has posted ­another record dividend and launched a new share buyback as its half-year profit surged by more than 30 per cent to $5.91 billion.

RIO TINTO has posted ­another record dividend and launched a new share buyback as its half-year profit surged by more than 30 per cent to $5.91 billion.

The latest cash splash on shareholders came as the ­mining giant’s chief called for major economies such as the US and China to “find common ground” in how they dealt with trade.

Jean-Sebastien Jacques said that, while the introduction of tariffs on a range of goods across the globe had not impacted Rio, 90 per cent of the company’s products moved from one country to another.

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“Trade is absolutely essential for us,” Mr Jacques said on Wednesday.

“Trade is the best way to create wealth for all parties.

“We really hope that people talk to each other, put the ­issues on the table and find common ground.”

Mr Jacques also called on the federal government to maintain its support for lowering the corporate tax rate for all businesses.

“From a mining business, if you combine tax and royalties, the truth of the matter is that Australia doesn’t rank very well in the league table,” he said. “It’s about further ­investment, it’s about productivity, it’s about creating more jobs.”

Mr Jacques delivered the comments after Rio handed down a net profit of $US4.38 billion ($5.91 billion) for the six months to June, up 33 per cent from $US3.31 billion in the same ­period a year earlier.

Rio Tinto CEO Jean Sebastien Jacques.

Underlying profit — which strips out one-offs such as asset writedowns and sales — rose 12 per cent to $US4.42 billion for the first half of 2018.

Revenue increased by $US600 million to $US19.9 billion as Rio increased production of iron ore, bauxite and copper, and got higher prices for aluminium and copper.

Analysts had been expecting Rio to report an underlying profit of $US4.45 billion and revenue of $US21.5 billion, ­according to Bloomberg.

Rio reported its results after the close of the Australian bourse but its UK-listed shares fell in early trade there.

The miner declared a record interim dividend of $US1.27 a share totalling $US2.2 billion, or 50 per cent of its underlying profit.

It also announced a new $US1 billion share buyback, under which it will buy its own shares to increase the price.

Rio announced $US5 billion in asset sales during the six months to June and struck a $US3.5 billion dollar deal to sell its interest in the Grasberg gold and copper mine in ­Indonesia last month.

The update came as Rio ­announced it had approved $US146 million of funding to undertake initial work at a new iron ore mine known as Koodaideri in the Pilbara. A final investment decision on the $2.9 billion project, which will take Rio’s output beyond 360 million tonnes a year, is expected by the end of the year.

A new wave of money is flowing into the nation’s iron ore operations with BHP and Fortescue Metals both approving a $4.6 billion project and Fortescue Metals a $1.7 billion one earlier this year.

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