Rio Tinto on Wednesday beat expectations when it reported its highest annual underlying earnings since 2014 and announced a bumper dividend after a string of divestments.
Flush from the recent sale of its stake in the Grasberg copper mine in Indonesia and other non-core aluminium and coal assets, Rio will have returned total cash of $13.5 billion to shareholders for the year, after declaring a $4 billion special dividend of $2.43 per share and a final dividend of $1.80.
The special dividend was "far bigger than expected," said analyst Glyn Lawcock of UBS in Sydney.
"I think this continues to deliver on their promise of returning cash to shareholders and not doing anything dumb," he said, a reference to the top-of-the-cycle asset purchases at the peak of the last commodity boom.
"We have once again announced record cash returns to shareholders," Chief Executive Jean-Sébastien Jacques said, pointing to the miner's "value over volume" strategy.
Underlying earnings for the 12 months ended on Dec. 31 rose to $8.81 billion, from $8.63 billion a year earlier, after its copper and minerals divisions beat expectations, offsetting higher aluminium costs.
The figure was significantly higher than a consensus estimate of $8.47 billion compiled by Vuma Financial.
Chief Commercial Officer Simon Trott told reporters on a media call that Rio had little scope to boost its iron ore output after a deadly dam burst cut supply from Brazil's Vale.