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Rio Tinto said it was rewarding shareholders with a $3 billion cash return after rising commodity prices helped it to more than double its underlying earnings in the first half. The FTSE 100
mining group also told shareholders today that it had dramatically boosted the cashflow that it was generating from its existing operations and that it had hit its $2 billion cost reduction
target six months early. Jean-Sébastien Jacques, Rio Tinto’s chief executive, said the miner was “shifting gear” to concentrate on generating value from its productivity programme and would
be working to improve its portfolio of assets to ensure higher returns for investors in the future. The cash return represents a boost for shareholders in Rio, which returned to profit
earlier this year and has already promised to return $500 million by buying back its shares in the market. The miner has also benefited from the $2.7 billion sale of its thermal coal
business in Australia, and today added that it was making progress in its perceived growth areas: the Oyu Tolgoi copper mine in the south Gobi desert in Mongolia, its Amrun bauxite project
in Australia, and the Silvergrass iron ore mine, also in Australia. Advertisement The miner, which told investors more than a year ago to brace for a fall in dividend payouts, lifted its
half-year dividend by 144 per cent to 110 cents a share, in a payment that is worth $2 billion. Rio Tinto also doubled the $500 million proposed buyback programme to $1 billion, taking the
total pledged return to $3 billion in the first half. Mr Jacques said: “By driving performance, focusing on cash and allocating it with discipline we are delivering superior cash returns to
our shareholders. These are strong results.” Rio generated $6.3 billion of cashflow for its operating activities during the first half, a 95 per cent increase in the $3.24 billion over the
same period last year. Underlying earnings jumped by 152 per cent to just over $3.9 billion over the period, and underlying profits before tax and other items rose by 68 per cent to $9
billion. Advertisement As well as cutting its net debts by $2 billion to $7.6 billion, Rio said it had reduced its operating cash costs by $2.1 billion, six months ahead of schedule. The
boost to Rio shareholders also comes as it contends with an inquiry by the Serious Fraud Office into possible corruption at the Simandou iron ore deposit in Guinea, after the miner had
earlier reported itself to authorities in Britain, Australia and America over commission payments. Rio Tinto shares finished 3.3 per cent lower at £33.95p.