February 12, 2015 / 6:11 AM / 3 years ago

Rio Tinto plans $2 bln buyback as H2 profit dives

MELBOURNE, Feb 12 (Reuters) - Global miner Rio Tinto said it would return $2 billion to shareholders through a buyback despite reporting a 30 percent slide in second-half profit on Thursday, its worst half year profit in two years.

The world no.2 miner has been under pressure to please investors to ward off a fresh takeover approach from rival Glencore Plc, despite a slump in the price of its biggest earner iron ore.

“With lower commodity prices and uncertain global economic trends, the operating environment remains tough. However, in these conditions Rio Tinto’s qualities and competitive advantages deliver superior value,” Chief Executive Sam Walsh said in a statement.

Underlying earnings for the six months to Dec. 31 fell to $4.19 billion from $5.99 billion a year earlier, based on Reuters calculations off the full-year result. This was well above analysts’ forecasts of $3.76 billion.

Rio Tinto’s Australian shares have fallen 10.3 percent over the past year against a 9.8 percent rise in the broader market, but have outperformed rival BHP Billiton , which has been hammered by a slump in oil prices along with iron ore.

Reporting by Sonali Paul; Editing by Richard Pullin

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