Commodities boom fuels record £12 billion payday for FTSE 100 miner Rio Tinto

Sky-high iron ore prices have enabled Rio Tinto to deliver one of the largest annual dividends in UK corporate history.

The FTSE 100 miner will hand a total of $16.8 billion (£12.4bn) to investors, higher than traditional big-payers like Apple and Shell - and second only to Vodafone's £18 billion payday in 2014.

The Anglo-Australian group's net earnings of $21 billion (£15.6bn) in 2021 - more than double 2020 - driven by runaway prices for steel, copper and aluminium as global economies recover.

While its balance sheet is rosy, Rio admitted repairing its reputation from scandals including the destruction of ancient Aboriginal caves and revelations of a culture of sexual harassment and racism in the workplace will be a "multi-year journey".

Analysts warned its reliance on high commodity prices and a commitment to spending £5.5billion to halve carbon emissions by 2030 means future rewards are likely to be less generous.

Its pivot toward mining metals such as copper and lithium to power the green energy transition suffered a setback from Serbia's withdrawal of an exploration licence for the planned $2.4 billion Jadar mine - a "disappointing" ruling which Rio is set to challenge.

Jakob Stausholm, who took the reins as CEO from Jean-Sébastien Jacques in the boardroom fallout from the Juukan Gorge scandal, said: “We have a portfolio that is well positioned and are targeting disciplined investment in commodities that will see strong demand in the coming decades."

AJ Bell's Russ Mould said: "Rio Tinto’s headline grabbing $16.8 billion total dividend payment for 2021 tops the $15.7 billion in dividends paid by Shell in 2018.

“That’s very impressive and is even greater than the approximate $14.5 billion Apple is paying annually in dividends based on its current quarterly run-rate.

“The big question now is whether Rio’s dividends and earnings have peaked in the current commodities cycle.

“There are plenty of headwinds to suggest global economic growth may slow and forecasts would suggest Rio’s dividends are going to get progressively smaller over the next three years."