Iron ore rally helps Rio Tinto tee up bumper in­vestor pay­out

The Sunday Telegraph - Money & Business - - Business - By Jon Yeo­mans

MIN­ING gi­ant Rio Tinto is on course to un­veil a bumper pay­out this week thanks to stronger com­mod­ity prices.

The FTSE 100 com­pany could in­crease re­turns to share­hold­ers by up to $2.5bn (£1.91bn) when it re­ports first-half re­sults on Wed­nes­day.

The An­glo-australian be­he­moth has al­ready re­turned $288m to in­vestors via a $500m share buy­back pro­gramme it launched in March.

“We see Rio sub­stan­tially in­creas­ing its cap­i­tal re­turns by $2.5bn this half fol­lowed by $5bn in 2018,” said an­a­lysts at Credit Suisse. De­mand in China for iron ore and alu­minium, two key met­als pro­duced by the miner, has helped boost the wind­fall. An­a­lysts at RBC also raised the prospect of a spe­cial div­i­dend

‘We see Rio Tinto sub­stan­tially in­creas­ing its $500m cap­i­tal re­turns by $5bn in 2018’

later in the year once it banks the cash from the multi-bil­lion dol­lar sale of its Australian coal mines.

Last month, Rio sealed the $2.7bn sale of its Hunter Val­ley coal mines in Aus­tralia to China’s Yan­coal, which beat Glen­core to the prize af­ter a bid­ding war. The deal is ex­pected to com­plete in Septem­ber. Last week, Glen­core struck an agree­ment to take a stake in mines from Yan­coal.

Even be­fore the min­ing in­dus­try was bat­tered by a two-year down­turn in com­mod­ity prices, Rio was con­sid­ered to have the strong­est bal­ance sheet of the ma­jor min­ers.

Jean-se­bastien Jacques, the firm’s boss, has com­mis­sioned three new projects to ex­pand its pro­duc­tion of cop­per, iron ore and baux­ite, used in alu­minium.

Yet de­spite this out­lay, Rio is keep­ing a lid on costs, with cap­i­tal ex­pen­di­ture next year ex­pected to be con­sid­er­ably be­low what it spent in 2014.

Colos­sus of learn­ing Plans to use Bletch­ley Park to pro­tect na­tional se­cu­rity for the first time since the end of the Se­cond World War, by turn­ing it into a cy­ber-se­cu­rity school, have been de­layed. The Col­lege of Na­tional Se­cu­rity – which will be free to around 450 stu­dents – was due to open next Oc­to­ber but is still wait­ing to ap­ply for Gov­ern­ment fund­ing.

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