Thursday 20 September 2018 12:36 pm

Rio Tinto announces $3.2bn share buyback after sale of Australian coal mines

Reporter at City A.M. covering banking, markets and insurance

Reporter at City A.M. covering banking, markets and insurance

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Mining giant Rio Tinto has announced a $3.2bn (£2.4bn) share buyback programme following its sales of Australian coal assets.

The miner's London share price rose more than two per cent following the announcement and its listing on the Australian Securities Exchange climbed 3.5 per cent.

The world's third largest mining company said it would conduct an off-market share buyback for up to 41.2m shares in its Australian entity Rio Tinto Ltd – valued at $1.9bn – and further on-market purchases of London-listed Rio Tinto plc shares, taking the figure to $3.2bn.

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The buyback programme is in addition to the company's existing buyback programmes, of which $1.7bn in shares remain to be purchased.

Chief executive, Jean-Sebastian Jacques, said: “Returning $3.2bn of coal disposal proceeds demonstrates our commitment to capital discipline and providing sector leading shareholder returns.

“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.”

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Rio Tinto said it wanted to reduce the share capital of Rio Tinto plc.

The money comes from the sale of three Australian coal mines, Hail Creek, Valeria and Winchester South.