After riding the iron ore wave to its most lucrative six months in history, major Australian miner Rio Tinto (ASX:RIO) is set to return USD$9.1 billion to shareholders in dividends for H1 2021.
Rio reported better-than-expected underlying earnings of USD$12.2 billion for the first six months of the year. Rio shareholders will receive a total of USD$5.61 per share in dividends for H1 2021, comprised of ordinary and special dividends.
The return to shareholders announced on Wednesday was more than twice the amount of the previous record for a Rio half-year dividend.
Management comments
Rio Tinto CEO Jakob Stausholm said: “Government stimulus in response to ongoing COVID-19 pressures has driven strong demand for our products at a time of constrained supply resulting in a significant spike in most prices. We focused on safely running our world-class assets and supplying products to our customers. This enabled us, despite operational challenges, to deliver record financial results with free cash flow of $10.2 billion and underlying earnings of $12.2 billion, after taxes and government royalties of $7.3 billion. We are further strengthening the portfolio with our commitment to fund the high-quality Jadar lithium project, which signals our large-scale entry into the fast-growing battery materials market. We will pay an interim dividend of 561 US cents per share, representing 75% of underlying earnings.
“We are making progress on our four priorities, identifying opportunities for operational improvement, advancing our ESG agenda, taking important investment decisions and stepping up our external engagement. We are making real and lasting changes to the way we engage, interact and operate and are committed to ensuring that we have strong and positive relationships wherever we do business. We have identified what we need to do to make Rio Tinto a better company for the long term, with the right teams in place to unleash our full potential.”