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Regal Group International: Citigroup says Rio Tinto ready for a $10 billion share buyback in 2011.

After slashing debt, Rio is still expected to move into a strong cash position in 2011.

Nov. 11, 2010 - PRLog -- Regal Group International sources report that according to Citigroup Inc., the globes third-largest mining firm, Rio Tinto Group may be in a position to start a $10 billion share buyback in early 2011 and still be able to sustain record forecast spending on its mine projects.

Citigroup analysts led by Heath Jansen said in a recent report that the buyback would be 6% earnings per share accretive.

Rio Tinto CEO Tom Albanese has managed to drive down the firm’s debt which ballooned after its $38.1 billion acquisition of Alcan Inc. in 2007 and has increased profits on the back of stronger prices for metals, iron ore and coal. In its mid-year report the mining giant reported that first-half income more than tripled to $5.85 billion.

“We expect Rio to move into a net cash position in 2011,” Regal Group International believes CitiGroup’s report said. “This will allow the company to look at growing through M&A or returning cash to shareholders through buybacks.”

The New York-based Citigroup estimates that Rio could have net cash of about $9.4 billion in 2011 which is likely to increase to $23.9 billion in 2012. Rio has projected spending on its mining projects, including the expansion of its iron ore operations in Western Australia, of $9 billion in 2011, fifty percent higher than estimated in 2009.

“Our priority is investing in value adding growth,” Rio Tinto told Regal Group International in a recent statement. “Additionally we target a single A credit rating and are committed to resuming our progressive dividend policy over the longer term.”

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Regal Group International is a full service commodity trading advisory offering services to traders ranging from the beginner, with no experience in the markets at all, to the advanced trader who is looking for an avenue to place fast efficient orders.

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Source:Regal Group International
Location:Hong Kong Island - Hong Kong
Industry:Business, Finance, Investment
Tags:Commodity Trading, Stock Market, Shares, Investment, Iron Ore, Mining, Copper, Metals, Minerals, Crude Oil, Oil Products

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