Rio Tinto Planning $4 Billion Buyback Next Month

Rio Tinto will announce a $4 billion buy back next month as part of a five-year strategy to lift dividends by at least 10 percent, reports the Australian Financial Review.

According to the Financial Review:

A buyback could support Rio Tinto’s share price and please investors who might be considering supporting ­Glencore’s hostile merger proposal. But it could also drive up Rio Tinto’s debt when prices for its main product, iron ore, have fallen 50 per cent to $US70.67 a tonne.

Credit Suisse mining analyst Paul McTaggart said Rio could announce next month an on-market buyback of up to $US4 billion run over at least three years, and increase its underlying ­dividend 15 per cent.

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