Rio Tinto Should Hike Dividend, RBS Says

Rio Tinto RIO, the world's third-largest mining company, should give consideration to a higher dividend payment, according to Royal Bank of Scotland, which pointed to Rio's improving cash position as one reason a higher payout should be considered. Rio, the world's number two iron ore producer behind Brazil's Vale VALE could wait until it announces its first half profit later this year before announcing any changes to capital management, Bloomberg News reported, citing RBS. Rio will hold $28 billion in cash next, but may consider a repurchase of its London-listed stock. RBS cut its net profit forecast for 2011 by 4 percent to $14.7 billion because of the rising Australian dollar and increasing costs in producing coal and iron ore, Bloomberg reported. Australian press reports said earlier this week that massive flooding in Queensland is not likely to have a material impact on earnings for Rio and its rivals.