Rio Tinto pays dividend as iron ore prices soar

Soaring iron ore prices and better-than-expected interim profits allowed mining giant Rio Tinto to pay out a dividend.

The company on Wednesday reported underlying earnings of $4.75bn for the six months to June 30, beating market expectations of $4.36bn. Investors would receive an interim dividend of $1.55 a share, the company said.

However, Australia’s second-biggest miner took a $1bn hit on its loss-making aluminium smelters, which have faced high energy costs, and its Diavik diamond mine in Canada.

Iron ore prices have remained resilient this year, sitting above $100 a tonne despite predictions of a fall, as China presses on with its infrastructure development plans and customers worry about a supply shortfall from Brazil.

Rio’s underlying earnings from the commodity, which accounts for about 80% of profit, rose 1% to $4.56bn as shipments rose 3%.