Rio Tinto (RIO.L) May Reinstate Dividend After Halving Debt

Reports are Rio Tinto (RIO.L) has a good chance of reinstating its dividend after it is expected to announce it has paid down half of its debt load.

After acquiring the Canadian aluminium group Alcan, Rio Tinto had 24.9 billion pounds of debt on its books, about half of which is now paid off.

Under normal circumstances the mining giant would have serviced the debt already, but the global recession and tight credit markets kept it from doing so.

After selling off a number of its assets recently, sources say the debt has been reduced by over 10 billion pounds during 2009. Rio Tinto has evidently far exceeded that goal, which has brought expectations of about the debt being reduced by half.

The company is expected to make the announcement and confirmation during its annual report on this coming Thursday.