Rio Tinto profit up 55 per cent in H1-08 as iron ore prices soar

26 August 2008

Mumbai: Global miner Rio Tinto posted a 55 per cent jump in first-half profit, boosted by a near doubling of iron ore prices amidst strong demand from China and other Asian countries.

Rio Tinto, which took over Canadian aluminium major Alcan last year, also raised its dividend. The company also forecast a firm outlook in the coming years.

''While the equity markets are currently focused on downside risks, we believe there are potential offsets on the upside based on continued strength in commodity demand, low inventory levels and a supply side which continues to face multiple constraints,'' chairman Paul Skinner said in a statement.

''The group continues to perform strongly, and the outlook remains positive," he said.

Rio Tinto, meanwhile, is trying to deflect a $150 billion takeover bid from bigger rival BHP Billiton saying it is too low. Australia's competition commission, too, last week said a merger of the two mining giants would have implications for iron ore prices, which are already on the boil.

Skinner reiterated the group's view that BHP's offer of 3.4 shares for each Rio Tinto share was too low. ''The group's performance in the first half, together with our growth potential, supports the boards' view that Rio Tinto presents a very strong standalone value proposition for shareholders,'' he said.