Rio Tinto has sold more than 300 million tonnes of iron ore in a year for the first time but a 33 per cent price plunge has raised doubts about its promised higher shareholder returns.
The world's second largest miner beat its own guidance but missed some analysts' forecasts in lifting 2014 iron ore sales by 17 per cent to 302.6 million tonnes.
However the fall in its average realised price was far more dramatic: down 33 per cent from $US126 a tonne in 2013 to $US84.30.
The spot price of the steelmaking commodity - Australia's biggest export - was $US68.09 a tonne on Tuesday.
Chief executive Sam Walsh said it was a successful year of production, capped off with a robust fourth quarter of 82.2 million tonnes of shipments.
"In a challenging market Rio Tinto remains focused on operating and commercial excellence to leverage our low-cost position and maximise value for shareholders," he said.
He told investors at the start of December that Rio was committed to materially increasing returns, which analysts believe will involve a $US4 billion share buyback and five-year strategy to lift dividends.
Fat Prophets resource David Lennox questioned whether Rio should be announcing a lift in shareholder returns in the current environment.
"Rio, BHP and the other majors have got their balance sheets into order to nurse their operations through what has been a very difficult couple of years," he told AAP.
"When there is an improvement in the commodity cycle they will be well leveraged to that and that is the point where they should deliver on shareholder returns."
However Rio is facing unwelcome merger interest from Glencore and rewarding shareholders would help stymie that.
Rio used iron ore stockpiles to sell more than seven million tonnes more than the 295.4 million tonnes it produced in 2014, an 11 per cent lift.
The extra cash from those sales would fund the buybacks.
Rio's production of its second-biggest commodity, copper, missed expectations and was viewed as slightly disappointing, given China's copper imports rose 18 per cent in 2014.
The miner blamed water restrictions at the Escondida mine in Chile for a 23 per cent fall in quarterly production.
Full year production increased four per cent to 603,100 tonnes but prices dropped 14 per cent to an estimated average $US2.87 a pound.
Aluminium prices rose 6.5 per cent to $US2,395 a tonne, as production declined one per cent to 3,361 tonnes.
The mostly weaker commodity prices would mean a weaker half year profit being announced in February, but Mr Lennox expects iron ore to improve in 2015.
If China's iron ore imports again grow by 13 per cent this year as they did in 2014, any surplus in the market would be gone, he said.
"We can see prices certainly stabilising and looking stronger through to the end of 2015 ... we then start to we think see some positive economic activity in Europe," he said.
Rio's shares dropped 47 cents, or 0.9 per cent, to $53.69.
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