Rio Tinto hits rich vein


Rio Tinto, the world's second-largest producer of iron ore, saw its first-half net earnings shoot up by 75 per cent to $3,796 million (£2,026 million) year-on-year, it confirmed today.

The London-based group, whose success was largely caused by high demand from China allowing prices to rise, was boosted further by its increased capacity in copper and iron ore, the result of a previous investment drive.

"Our financial strength allows us to pursue [a] substantial capital return to shareholders while undertaking a record organic investment programme, and retaining the flexibility to take advantage of opportunities as they arise," Rio Tinto's chairman, Paul Skinner, said.

A "special dividend" of $1,500 million (£800 million) was paid to shareholders in April, but investment remains the key for Rio Tinto, which plans on using the cash boost reflected by current strong demand to enhance the group's future prospects. In total $1,758 million (£938 million) was spent on capital expenditure in the first half of 2006, helping improve the group's transport infrastructure.

"Although we have seen increased volatility in financial markets, underlying demand for our products remains strong, and we remain positive about the outlook for the global economy and our markets," Mr Skinner added.

Rio Tinto, which operates in Australia, the Americas, Africa and Asia, produces over 50 million tonnes of iron ore every year.

Despite today's impressive results shares in Rio Tinto dropped by 0.89 per cent in early morning trading.

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