Rio Tinto Reports Record Profit, Plans $5B Buyback

Rio Tinto RIO, the world's second-largest iron ore producer, said its second-half 2010 profit, excluding one-time items, more than doubled to $8.22 billion from $3.73 billion a year earlier. Analysts were forecasting a profit of $8.29 billion. Robust demand for copper, coal and iron ore by China helped drive Rio's robust results. The company is planning to spend $13 billion to expand current mines and to develop new ones in an effort to take advantage of higher commodities prices. Despite the spending plans, Rio said it will buyback $5 billion of its own shares through the end of next year and raise its final 2010 dividend. Rio declared a final dividend of 63 cents a share after declaring an interim dividend in August of 45 cents, according to Bloomberg News. Separately, Rio extended its $3.9 billion takeover offer for Australia's Riversdale Mining, a maker of coking coal. Brazilian steelmaker Companhia Siderurgica Nacional SID has been boosting its stake in Riversdale, but isn't seen as mulling a takeover. The company owns almost 20% of Riversdale shares while Rio owns nearly 15%.