Rio Tinto H1 profit jumps 55 percent

By Sonali Paul

MELBOURNE (Reuters) - Global miner Rio Tinto (RIO.AX) (RIO.L) posted a better-than-expected 55 percent jump in first-half profit, boosted by its 2007 takeover of Alcan and strong Chinese demand, and raised its dividend on Tuesday.

At a time when economists have been slicing their forecasts for commodity prices, Rio Tinto, like its hostile suitor BHP Billiton Ltd (BHP.AX)(BLT.L), was confident in its outlook.

"While the equity markets are currently focused on downside risks, we believe there are potential offsets on the upside based on continued strength in commodity demand, low inventory levels and a supply side which continues to face multiple constraints," Chairman Paul Skinner said in a statement.

"The group continues to perform strongly, and the outlook remains positive," he said.

Analysts were upbeat about the results.

"The headline profit number is certainly well ahead of expectations and the commentary associated with numbers appears very positive at this point in time," said analyst Adam Dixon at Ausbil Dexia in Australia.

"Rio's exposure to the bulk commodities sector has been extremely beneficial for the company and I think that the results will be very positively received by the market."

Rio shares in Sydney closed up 1.4 percent to A$124.06 (57.6 pounds) before the results were released, compared to a 0.2 percent fall in the benchmark S&P/ASX 200 .AXJO index.