Rio Tinto announces 300% jump in 2010 profits

Global Price Surge of Commodities Have Helped Miners

Global Price Surge of Commodities Have Helped Miners

Rising commodity prices and strong demand from emerging markets helped mining giant Rio Tinto nearly treble its profit in 2010.

Profit for the year was recorded at $14.3 billion (£8.9 billion), compared to $4.9 billion reported in 2009.

The Anglo-Australian miner said it plans to return $5 billion to shareholders by buying back shares by the end of 2012. The company announced a final dividend of 62 cents per share.

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

The final dividend for 2010 stands at 108 cents per share, 20% more than previously committed.

“Rio has come and surprised people on the upside with the dividend and the buy-back. The buy-back is clearly positive and it’s what shareholders were asking for”, said Glyn Lawcock – analyst at UBS.

Commodity prices world wide has seen a surge with prices of grain, cotton as well as minerals such ores and coal soaring in 2010. This has enabled mining companies book robust profits.

Xstrata, another miner announced on Tuesday that its profit nearly quadrupled to $6.6 billion in 2010.

The mining index has risen by about 8% over the last 12 months while Rio-Tinto’s shares jumped by 29% during the period.

Rio has extended the offer period for its acquisition bid of Australia based mining company Riversdale, by 14 days; the company said in a separate statement.

The Riversdale board has supported Rio’s bid and no counter offer has been made till date, Rio confirmed.

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