Rio Tinto has shrugged off worries about an over-supplied iron ore market, more than doubling its half year profit to $US4.4 billion.
The massive growth was achieved despite falls in the prices of its main commodities, which sliced nearly $US1.4 billion from its bottom line.
That was more than offset with extra production, plus larger than expected cost cutting.
Chief executive Sam Walsh rejected the suggestion that Rio and other iron ore majors Vale, BHP Billiton and Fortescue had made a crucial mistake in ramping up their production, forcing prices down.
He said Rio would benefit from China's determination to reduce pollution and smog - something Chinese premier Li Keqiang personally relayed to him this year - because of Rio's higher quality and less energy and waste intensive ore.
"From where we sit we're the lowest cost producer of quality benchmark iron ore with the highest (earnings) margin of 66 per cent," he told reporters.
The disputed but long predicted demise of lower grade iron ore miners was already occurring, with 85 million tonnes of production disappearing in China alone, he said.
China depends on iron ore imports for 50 per cent of its needs, and its economy was still growing at a healthy 7.5 per cent this year, while global GDP growth is expected to exceed three per cent, he said.
Rio's underlying earnings, which strips out $US843 million in one-off impairment charges, was up 21 per cent to $US5.1 billion ($A5.52 billion), beating analyst expectations.
Iron ore dominated the results, despite a 20 per cent fall in Rio's realised price for the commodity.
But Rio's biggest profit growth came in aluminium and copper, with 74 per cent and 71 per cent rises respectively.
IG market analyst Evan Lucas said that indicated a nice diversification of earnings, as Rio is often criticised for relying too heavily on iron ore.
Analysts were also impressed with $3.2 billion in cost cutting, made six months ahead of schedule.
Rio reduced its capital expenditure forecast for 2014 from $US11 billion to $US9 billion, and to $8 billion in 2015, on the back of its faster than expected iron ore expansion.
A 15 per cent hike of its the interim dividend to 96 US cents per share met expectations, and chief financial officer Chris Lynch predicted higher cash returns to shareholders at the end of 2014.
He said that would occur if the company further reduced net debt, which was down $US1.9 billion in the six months, to $US16.1 billion ($A17.42 billion).
Rio shares rose by one per cent in early trade in London, and in Australia the shares gained 50 cents, or 0.8 per cent, to $66.32 before the result was released.
RIO TINTO MORE THAN DOUBLES HALF YEAR PROFIT
* Net profit of $US4.4b, up from $US1.72b in 2013
* Underlying earnings of $US5.12b, up 21% from $US4.23b
* Interim dividend of 96 US cents per share, up from 83.5 US cents
BREAKDOWN OF RIO TINTO'S PERFORMANCE
* Iron ore made a $US4.68b profit, up 10 pct from $US4.27b in 2013
* Coal made a $US19m loss, up 63 pct from a $US52m loss
* Copper made a $US594m profit, up 71 pct from $US348m
* Aluminium made a $US373m profit, up 74 pct from $US214m
* Diamonds/minerals made a $US160m profit, down 17 pct from $192m
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