Why Rio Tinto retains dividend appeal
Miners are paying out billions of pounds of dividends this year, among them high-yielding Rio Tinto. City writer Graeme Evans explains the dividend trend.
19th February 2026 13:19
by Graeme Evans from interactive investor
The mining sector’s encouraging results season for dividend income continued today after Rio Tinto Ordinary Shares (LSE:RIO) matched BHP Group Ltd (LSE:BHP) by unveiling a distribution equivalent to 60% of earnings.
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Rio’s unchanged total dividend for 2025 of 402 US cents a share is worth $6.5 billion and includes plans for the 16 April payment of 254 US cents. This is a 13% rise on a year earlier and reverses the 16% decline seen at half-year results in July.
The 2025 total, which compared with the City consensus forecast of 396 US cents, extends Rio’s record of returns at the top end of its 40-60% of earnings guidance range to 10 years in a row.
On Tuesday, BHP's interim results showed a half-year distribution of $3.7 billion after it announced its intention to pay a dividend of 73 US cents a share on 26 March. This is 46% higher than a year ago and much better than the City consensus of 62 US cents.
The company said it has now returned more than $110 billion to shareholders since the introduction of its capital allocation framework in 2016, equivalent to 70% of its current market capitalisation.
BHP’s dividend policy is to pay out a minimum of 50% of earnings each half. Since 2018 the average ratio for its ordinary dividend has been about 70%, with the lowest level being 50% at last year’s 2025 results.
A 53% ratio had been forecast this time, but BHP delivered 60% of earnings, which it said reflected strong results and “confidence in our outlook and cash flows”.
Anglo American (LSE:AAL), which is due to report annual results on Friday, has a policy of paying a base dividend of 40% of underlying earnings each half year.
UBS noted this month that Anglo has maintained the 40% payout ever since the dividend was restarted with 2017’s half-year results, only topping up returns to shareholders with special dividends in July 2021 and February 2022.
The bank expects another 40% of underlying earnings at 13 US cents a share, although it adds that this estimate is significantly below the City consensus at 24 US cents. The miner declared 22 US cents last year and seven cents at the half-year results.
Glencore (LSE:GLEN)'s policy is to distribute a fixed $1 billion and a variable element equivalent to a minimum payout of 25% of the free cash flow of the group's Industrial businesses. This amounted to $1.2 billion or 10 US cents a share in yesterday’s results, with no top-up payments due to net debt being above the cap of $10 billion.
However, the return of proceeds from an agribusiness merger involving Glencore’s interest in Viterra allowed an additional distribution of $800 million or seven US cents.
The total of $2 billion or 17 US cents, which is in line with City expectations and represents a 2.5% yield, is due to be paid as normal in two equal instalments in May and September.
UBS said today that it sees potential for a further special distribution with half-year results if Glencore has exited the full stake in relation to its Viterra transaction.
Including the $4.1 billion via Rio Tinto’s full-year award, the four mining giants are set to announce dividends of almost $10 billion in the current results season. This compares with June’s outlay of $7.1 billion.
However, the awards are still in sharp contrast to 2022’s peak for dividend distributions, when miners accounted for £1 in every £6 declared by UK listed companies.
For the five years to 31 December, Rio Tinto’s total shareholder return stood at 66.4% compared with 79.8% in 2024’s annual report and 263.3% in 2021. The figure for 2025 is below the S&P Global Mining Index and the MSCI World Index.
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Morgan Stanley said today’s earnings figures, which included an unchanged 669.2 US cents per share, were within 1-2% of expectations after a strong beat in the copper top-line performance was offset by a weaker aluminium margin.
Rio highlighted an 8% uplift in copper equivalent production, driven by the ongoing ramp-up of the Oyu Tolgoi underground mine in Mongolia, and record iron ore production since April from its Pilbara operations in Australia.
Chief executive Simon Trott said Rio remained on track to achieve 3% compound growth in copper production to 2030. He added: “At the same time, the structural cost improvements underway today position us for higher margins and cash flow.
“With a high-quality pipeline, anchored in copper, we have clear visibility to extend this growth profile well into the next decade.”
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