Rio Tinto's profit soars 90 per cent to $12 billion

Prices for iron ore, Rio's primary earner, stayed between the US$60 to US$70 range through the year, helped by strong continuing demand from Chinese steel mills. Picture / Getty Images

Rio Tinto's full year net profit has soared 90 per cent to US$8.76 billion ($12b), helped by stronger iron ore and coal prices in 2017.

The mining giant said higher prices boosted its underlying earnings by US$4.1b in the 12 months to December 31.

Rio's underlying earnings, which excludes impairments and exchange losses, rose 69 per cent to US$8.63b, matching analyst expectations.

Chief executive Jean-Sebastien Jacques said Rio would deliver cash returns of US$9.7b to its shareholders for 2017, through an increased dividend and share buy backs, including an additional US$1b buy back of London-listed shares.

"The strength of our cashflow is a result of resilient prices during the year coupled with a robust operational performance and a focus on mine to market productivity," he said.

A final dividend of US$1.80 per share takes Rio's full-year dividends to a record US$2.90, from US$1.70 in 2016.

Prices for iron ore, Rio's primary earner, peaked at nearly US$95 a tonne in February 2017, but have stayed between the US$60 to US$70 range through the year, helped by strong continuing demand from Chinese steel mills.

Iron ore currently trades at about US$76 a tonne.

The company's underlying earnings from iron ore increased 35 per cent to US$11.5b, while earnings from its energy division, which includes its metallurgical coal operations, rose 55 per cent to US$2.8b.

Rio Tinto expects capital expenditure to remain at about US$5.5b in 2018 and US$6b in both 2019 and 2020.

RIO TINTO'S PROFIT SOARS

• Full-year net profit up 90 per cent to US$8.76b

• Revenue up 64 per cent to US$13.88b

• Final dividend up US55c to US$1.80 per share