Hikes interim dividend to $1.27 per share H1 underlying earnings...

• Hikes interim dividend to $1.27 per share
• H1 underlying earnings miss analysts' estimates

(Adds divestments, context)

Aug 1 (Reuters) - Global miner Rio Tinto (RIO) RIO.L said on Wednesday its first-half profit rose 12 percent, just below expectations, but raised its interim dividend and earmarked an additional $1 billion to buy back London-listed shares.

Underlying earnings for the six months to June 30 grew to $4.42 billion as higher iron ore output overcame lower prices. That was below forecasts of $4.53 billion, according to estimates in an independent survey of 15 analysts, but above $3.94 billion in the same period a year ago.

Rio declared a half-year dividend of $1.27 a share, equivalent to $2.2 billion, up from $1.10 a share a year ago.

The increase in funds for share buybacks comes as asset sales worth $5 billion already announced in 2018 have left the world's No. 2 iron ore miner with a cash pile well in excess of the $5.5 billion outlined for planned capital expenditure this year.

In one deal, Rio has outlined the proposed terms of the sale of its 40 percent stake in Grasberg, the world's second biggest copper mine, to an Indonesian government-owned holding firm for $3.5 billion.

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