Mining giant Rio Tinto will return proceeds from the recent $US2.7 billion sale of its NSW coal operations to shareholders through a share buyback.
The company on Friday announced an additional share buyback of $US2.5 billion ($A3.2 billion), comprising of an off-market buyback worth $US560 million for the Australian-listed shares and another $US1.9 billion allocation to its existing on-market buyback program for London-listed shares.
Chief executive Jean Sebastien Jacques said the move demonstrated Rio's commitment to delivering superior value and to returning cash to shareholders.
"Shareholder returns of this scale are made possible by maintaining the strongest balance sheet in the sector and a disciplined capital allocation process," he said.
Rio shareholders in June backed a $US2.69 billion bid by China's Yancoal to buy Rio's Coal & Allied Industries that included majority stakes in the Hunter Valley Operations and the Mount Thorley Warkworth mine, and a 36.5 per cent interest in the Newcastle Port coal export terminal.
The sale marked Rio Tinto's near exit from thermal coal assets, which it does not consider a core business.
The fresh share buyback comes on top of two buyback programs worth $US500 million and $US1 billion that were announced earlier in 2017.
The mining giant in August announced a record interim dividend after its underlying half-year profit more than doubled due to stronger commodity prices.
On Friday, Rio said the off-market buyback of its Australian shares will be completed in 2017, while the buyback of London-listed shares will start on December 27 and end no later than December 2018.
Rio Tinto's Australian-listed shares have risen more than third in value over the past 12 months.
The stock closed at $65.50 on Thursday.
