the profit announcement today Rio Tinto set to unveil $US5bn...

the profit announcement today Rio Tinto set to unveil $US5bn profit
February 2, 2006 - 7:19AM

Mining giant Rio Tinto is on Thursday expected to announce a record full year profit of around $US5 billion ($A6.60 billion).

The 2005 result will eclipse the miner's 2004 profit of $US2.813 billion ($A3.62 billion).

Rio Tinto, like other resources companies, is benefiting from strong commodity prices supported by hefty demand from China.

Iron ore will be one of the key drivers of the massive profit, thanks to the 71.5 per cent price increase the big miners squeezed out of Asian steel makers last year.

And with another 20 per cent hike in the iron ore price expected this year, analysts are already penciling in forecasts for an even bigger profit in 2006.

The Anglo-Australian miner is awash with money and investors are now asking whether shareholders could be rewarded with a share buyback.

Rio Tinto has a capital management program underway but there will be keen interest on Thursday in any fresh announcements about buy back schemes.

Mining analysts are also eager to see how the company has dealt with spiralling costs that have hit the entire mining industry.

Rio Tinto shares closed down 61 cents on Wednesday at $75.21.