Rio Tinto is to pay out a $6.5bn (£4.7bn) dividend, after it benefited from demand for iron ore as China’s economy bounced back from the coronavirus lockdown last year.
The world’s second largest mining company reported a 20% rise in underlying profit to $12.4bn. The better-than-expected profits followed an increase in commodity prices, particularly iron ore and copper, amid interruptions to global supply partly caused by the pandemic.
The price of iron ore, which is the most important commodity for Rio Tinto, rose last year to its highest levels since 2011 as China’s economy recovered faster than expected. That recovery led to greater demand for steel at a time when production of iron ore was disrupted in Brazil.
Commodity prices are also being driven up by hopes that governments around the world will invest in building projects to help restart economies after the pandemic.
Rio Tinto said it was paying out a final dividend of $5bn and a special dividend of $1.5bn, bringing its total 2020 payout to for the year to $9bn, the biggest in the company’s 148-year history.
This week a record interim dividend of more than $5bn was announced by fellow mining company BHP and the reinstatement of dividends at the commodity trader and miner Glencore.
Rio Tinto’s payout was bigger than expected as the group dealt with the fallout from the destruction of 46,000-year-old rock shelters in Australia’s Pilbara region last year.
The anger following the destruction of the sacred site at Juukan Gorge led to Jean-Sébastien Jacques being replaced by Jakob Stausholm as chief executive.
Unveiling his first set of full-year results, Stausholm said: “It has been an extraordinary year – our successful response to the Covid-19 pandemic and strong safety performance were overshadowed by the tragic events at the Juukan Gorge, which should never have happened.
“My new executive team and wider leadership of the company are all committed to unleashing Rio Tinto’s full potential. We will increase our focus on operational excellence and project development and strengthen our [environmental and social] credentials.
“We must earn the right to become a trusted partner for traditional owners, host communities, governments and other stakeholders but we all recognise that this will require sustained and consistent effort.”