External Content

The following content is sourced from external partners. We cannot guarantee that it is suitable for the visually or hearing impaired.

(Bloomberg) -- Rio Tinto Group, the world’s second-biggest mining company, plans to spend $2 billion in a share buyback after profit declined 9 percent last year following a slump in the price of iron ore.

Underlying profit dropped to $9.3 billion in the 12 months ended Dec. 31, London-based Rio said Thursday. That compares with the $8.97 billion average estimate of 26 analysts surveyed by Bloomberg. Estimates for the buyback before the release ranged from $1 billion to $2.5 billion according to forecasts from five analysts compiled by Bloomberg.

The decision to buy back shares comes six months after Chief Executive Officer Sam Walsh described the company as a “cash machine” following a cost-cutting program helped improve profit margins. It also follows Rio’s decision to fend off the advances of smaller rival Glencore Plc, which approached it about a possible merger last year.

Rio’s profit was crimped by the 47 percent collapse in the price of iron ore last year as a wave of new supplies from Australia compounded a glut of the steel-making raw material.

To contact the reporter on this story: Jesse Riseborough in London at jriseborough@bloomberg.net To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net Ana Monteiro

Neuer Inhalt

Horizontal Line

subscription form

Form for signing up for free newsletter.

Sign up for our free newsletters and get the top stories delivered to your inbox.

Click here to see more newsletters

The citizens' meeting

The citizens' meeting

The citizens' meeting