Miner Rio Tinto is set to launch a share buyback programme.
The world's second biggest miner has endured some tough trading conditions of late and recently announced a nine per cent fall in profits. This came after underlying earnings dropped to $9.3 billion (£6.09 billion). However, it is still pressing on with a share buyback programme valued at around $2 billion.
Rio Tinto noted that the decline in profits has been due to falling commodity prices and "uncertain global economic trends". The company explained that the share buyback scheme represents a total cash return to shareholders of around $6 billion. Officials also praised its 62,000-strong workforce for allowing it to achieve positive results in the past year.
Sam Walsh, Rio Tinto's chief executive, conceded that trading conditions had been difficult and added: "Our combination of world-class assets, disciplined capital allocation, balance sheet strength, operating and commercial excellence, and a culture of safety and integrity gives me confidence in our ability to continue to generate sustainable returns for our shareholders."
In October 2014, Rio Tinto confirmed that it had rejected an approach from rival Glencore. At the time the company said that it turned down the takeover bid in the August of that year stating that it was "not in the best interest" of its shareholders. The news had proved positive for Rio Tinto's share price which spike nine per cent in New York.
The failed takeover bid has placed increased pressure on to Rio Tinto as the firm looks to please its investors. Mr Walsh was confident that despite the ongoing economic issues throughout the world, the company would be able to perform to the standards expected.
Following the announcement of the share buyback programme, Rio Tinto's share price increased by 3.28 per cent as of 09:46 GMT on Wednesday (February 12th).
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