Rio Tinto reported a 47 percent slump in first-half profit on Wednesday as its chief executive told CNBC that the company would not rush into any merger and acquisition (M&A) activity while valuations were subdued.
"The entire strategy of Rio is based on 'build' and 'smart buy' and the word 'smart' is absolutely essential, you can put it in capital letters if I'm honest," new Chief Executive Jean-Sebastien Jacques told CNBC on Wednesday.
"It's about the quality of the assets and about the valuations ... If those (elements) are not there, we will not do it," he said.
"We will look at M&A but we are very focused in that space, it's all about the quality of the asset and the valuation - are we going to rush into the M&A space? The answer is 'no'."
His comments come as the global miner reported a 47 percent slump in first-half profit to its weakest in 12 years on Wednesday, and surprised the market with a higher than expected dividend of 45 cents per share. London-listed shares were flat in morning trade after the announcement.
Jacques told CNBC that despite the "very challenging and volatile market environment, it was a very strong set of results from our perspective."
In the global miner's earnings report, Jacques said he was focused on shoring up the company by cutting costs to withstand "uncertain and volatile markets" through the rest of this year.
"We are confident but absolutely not complacent," Jacques said on a conference call with media. "We expect the overall market to remain challenging and volatile."
Underlying earnings for the six months to June fell to $1.56 billion from $2.92 billion a year earlier, beating analysts' forecasts around $1.46 billion, according to an externally compiled consensus.
In a battered mining industry, the world's no.2 iron ore miner is strongly placed as it has cut debt faster than its peers, so much so that it is digging new iron ore, copper and bauxite mines while its rivals are slashing capital spending.
Still, Jacques told CNBC that the miner had a "clear view" of its portfolio and said that it was open to offers for its assets.
"I'm going to repeat what my predecessor said and say that all assets are for sale at any point in time. If somebody knocks at the door and offers a very good price for those assets, we will have to look at it. In 2012, we sold $3.7 billion of assets with a big chunk in the copper and coal space."
Rio Tinto was able to announce a half-year dividend of 45 cents a share, in stark contrast to rivals Anglo American and Brazil's Vale, which declared no dividends at their half-year results last week.
The payout beat analysts' forecast of 41 cents.
Rio Tinto in February scrapped a long-held policy of never cutting its annual dividend to help weather a prolonged commodities bust. It reaffirmed on Wednesday it would pay at least $1.10 a share in 2016, limiting its dividend cut this year to 49 percent.