Rio Tinto returns an additional ₤ 1.9 bn to investors with bumper payment

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Rising product costs and skyrocketing revenues have led mining group Rio Tinto to state a bumper dividend and more money for share buybacks amounting to $2.5 bn (₤ 1.9 bn).

Financiers in the FTSE 100 group will get an interim dividend of 110 United States cents per share, comparable to $2bn – a record for the company.

In addition, the Anglo Australian miner will double its existing $500m share buyback plan, so that it will have gotten $1bn of its own shares by the end of 2017.

Investor returns total up to around 75pc of underlying revenues in the very first half of the year, the company stated.

The payments draw a conclusive line under the two-year decline that blighted the mining market in between 2014 and 2015.

Much of the enhancement has originated from more powerful rates for iron ore, the steelmaking active ingredient that comprises the bulk of Rio’s revenues and is mined in huge amounts in Western Australia for sale mainly to China.

In the 6 months to June 30, Rio’s pre-tax earnings leapt 57pc to $4.96 bn, while income climbed up almost 20pc to $19.3 bn.

Net financial obligation fell by $2bn to $7.6 bn as the miner kept a tight rein on expenses.

Rio financiers might be in line for another money gold mine later on this year, as soon as the company banks money from the $2.7 bn sale of its coal mines in Australia to China-backed Yancoal.

Jean-Sebastien ‘J-S’ Jacques, president, stated: “By owning performance, concentrating on money and assigning it with discipline we are providing exceptional money go back to our investors.

“These are strong outcomes: running capital was $6.3 bn and we satisfied our $2bn money expense decrease target 6 months early.

“We are now moving equipment to concentrate on the untapped value from our performance program and continue to reinforce our portfolio to construct greater returns for the future.”

Paul Gait, an expert at Bernstein with a ‘purchase’ suggestion on the stock, stated: “Rio is an atm.”