Rio Tinto shareholders are getting a $3.2 billion buyback funded by coal mine sales

SuppliedA file photo of a Rio Tinto train in the Pilbara.

  • Rio Tinto will return $US3.2 billion from the disposal of coal assets to shareholders.
  • The cash comes from the sales of coal mines Hail Creek and Valeria, Winchester South and Kestrel.
  • The off-market buy-back tender will target up to 41.2 million shares, plus further on-market purchases.

Rio Tinto today announced a $US3.2 billion ($AU4.4 million) share buyback using the proceeds from the sale of its coal assets.

The off-market buy-back tender will target up to 41.2 million Rio Tinto Limited shares, with about $US1.9 billion ($AU2.6 million), plus further on-market purchases.

Rio shares last traded at $AU75.40.

“Returning $US3.2 billion of coal disposal proceeds demonstrates our commitment to capital discipline and providing sector leading shareholder returns,” says Rio Tinto chief executive J-S Jacques.

“We continue to focus our portfolio on those assets which provide the highest returns and growth, which will ensure that we continue to deliver superior value to our shareholders in the short, medium and long term”.

All shares purchased will be cancelled.

The $US3.2 billion comes from the sales of coal mines Hail Creek and Valeria, Winchester South and Kestrel.

The sale of Rio Tinto’s Aluminium Dunkerque smelter in northern France for $US500 million is yet to be completed.

The miner last month announced , equivalent to 127 US cents a share, or about 50% of underlying earnings.

Rio also indicated it would return $US5 billion gathered from divestments in 2018 to shareholders, with the precise timing and form to be determined.

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