The fresh round of returns, which will be funded with the proceeds from the company’s sale of its last remaining Australian coal assets, follows Rio’s previous promise to return up to $7 billion to shareholders through dividends and share buybacks.

Rio said it would conduct an off-market share buyback for up to 41.2 million of its Australian-listed shares, worth about $1.9 billion.
Not surprisingly, investors welcomed the news, with shares closing Thursday 3.58% higher in Sydney to A$78.10, while they were up 2.81% in London to 3,827p by 1:38 p.m. local time.

Rio said it would conduct an off-market share buyback for up to 41.2 million of its Australian-listed shares, worth about A$2.7 billion ($1.9B), as well as on-market purchases of its London-listed stock.

Previous buybacks have favoured the London arm of the Anglo-Australian miner and further returns to shareholders may be just around the corner as Rio has yet to complete its $500 million sale of the Aluminum Dunkerque smelter in France.

“Returning $3.2 billion of coal disposal proceeds demonstrates our commitment to capital discipline and providing sector-leading shareholder returns,” Rio Tinto Chief Executive Jean-Sébastien Jacques said in the statement.

Top Pick
Since Jacques took the helm in July 2016, Rio has focused on cutting costs, generating cash and returning as much of it as possible to investors through dividends and share buybacks.

BMO Capital Markets praised Rio’s move in a note Thursday calling the company its “top pick” among the diversified majors .

It also note that while Rio’s buybacks amounted to a shareholder return well ahead of its peers, the miner would eventually have to find other options to drive value, including possible acquisitions.