Shareholders of mining company have reportedly hit paydirt in 2021 after mining industry giant, Rio Tinto, announced a comprehensive investor windfall of more than $6.5 billion (approximately £4.7 billion) after a boom in prices of commodities and sky-rocketing company share prices.
According to reliable reports, Rio Tinto, which is the second largest mining enterprise in the world, reported approximately 20% jump in its underlying profit to over $12.4 billion. This jump was caused by a surge in iron ore demand across China as it saw an economic bounce back after coming out of its coronavirus lockdown in 2020.
The company’s better-than-anticipated profits, followed a sudden rise in commodity prices globally, including that of copper and iron ore due to interruptions to the global supply lines, partly caused by the COVID-19 pandemic.
As per reports, the miner would be paying out final dividend of more than $5 billion along with a special dividend of over $1.5 billion, which would bring its total payout for 2020 to approximately $9 billion, the highest in the enterprise’s 148-year long history.
The proposed investor windfall also follows a record-level payout of dividend from BHP, which holds the mantle of the world’s largest mining firm. BHP would be handing investors over $5.1 billion shortly after achieving the accolade of becoming the highest valued company on the LSE (London Stock Exchange). Meanwhile, another mining enterprise, Glencore, reinstated its dividend after it scrapped payouts last August, at approximately $1.6 billion.
Consequently, shareholders of mining enterprises are slated to receive record dividends after numerous mining companies listed in the stock market doubled their respective market valuations in 2020 owing to a steep rise in market prices of commodities.
Prices of iron ore, considered to be the most crucial commodity for the mining company, increased last year, hitting its biggest levels since 2011. A majority of this was driven by China’s unprecedented economic recovery. This recovery led to a higher demand for steel during a time when iron ore production was disrupted across Brazil.
Source credit: https://www.theguardian.com/business/2021/feb/17/rio-tinto-record-dollars-9bn-dividends-for-2020-mining-china-commodity-prices