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Rio Tinto on Wednesday reported its best annual earnings since 2011 and declared a record dividend payout, the second major iron ore producer to return windfalls to investors after unprecedented prices and demand for the steel ingredient.

Chinese infrastructure spending has sucked in record imports of iron ore and on Tuesday Rio’s industry peer BHP also surprised investors with fatter-than-expected returns.

“We have earned a lot of money last year,” said CEO Jakob Stausholm, who moved into the top job last month.

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“But we have also done a lot of deleveraging in the year and we are down to now having less than $1 billion of net debt. So it’s difficult to argue that we should hold back on dividends,” Stausholm told a media briefing.

Underlying earnings rose to $12.45 billion from $10.37 billion a year earlier, beating analysts’ estimates of $12.02 billion, Refinitiv IBES data showed.

China’s focus on infrastructure last year drove a more than 50% rise in the price of iron ore, which reached a record in December on China’s Dalian Commodity Exchange.

Miners are also expected to benefit from an expected rebound in the global economy from the rollout of COVID-19 vaccines.

Brenton Saunders, a portfolio manager at Pendal Group, said it was a solid result with a big beat on dividend expectations.

“Let’s not kid ourselves, the biggest part of this result is still strong commodity prices,” Saunders said.

Costs are in check and Rio is paying out a lot of what it is making compared to the peak of the last commodity cycle, he added.

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Rio’s half-year dividend plus special dividend was $6.5 billion compared with BHP’s $5.1 billion payout. Fortescue Metals Group Ltd reports on Thursday.

Rio declared a record final dividend of $3.09 per share, up from $2.31 in 2019, and announced a special dividend payout of 93 cents a share.

The peak of the last commodity cycle a decade ago was marked by cost overruns at global miners and over-payments for poor assets that were later followed by multi-billion dollar writedowns.

Stausholm told investors he was convinced Rio would find solutions in talks with the Mongolian government, which is seeking more tax revenue from the expansion of Rio’s massive Oyu Tolgoi copper-gold mine.

On Rio’s Simandou iron ore project in Guinea, Stausholm said the company would not make a big investment decision this year.

SACRED ROCK SHELTERS

Rio still needs to mend ties with the Aboriginal group whose sacred rock shelters it destroyed for an iron ore mine last year, and there is no timeline for that, said Stausholm, who visited Juukan Gorge last week.

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The miner has removed 54 million dry tonnes of iron ore from its reserves after a review of important Aboriginal sites.

Stausholm also did not rule out board changes at its London annual general meeting in April after investors were disappointed with the findings of a board-led review into the destruction.

Chairman Simon Thompson commissioned the review and independent director Michael L’Estrange delivered it.

“In terms of who will stand for election at the AGM, that will come out in early March so I can’t comment on that at this time,” Stausholm said.

To improve its green credentials, Rio has also set new scope 3 targets to lower the emissions of its customers, primarily the steel industry, following the example of BHP and Glencore . It said it would put the goal to an advisory vote at its 2022 AGM.

The board’s remuneration committee has added climate change to short-term incentive plans.

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