Underlying earnings before interest, tax, depreciation and amortisation soared 82% to $26 billion, while cash flows from operations jumped 70% to $23.5 billion.

Net debt dropped to $4.3 billion from $18.9 billion one year earlier.

The company has also announced a capital management program, comprising a $5 billion share buyback by the end of 2012.

The company previously committed to a dividend of 90c per share, but has increased that figure to $1.08.

Rio chief executive Tom Albanese said the company is entering its biggest ever phase of growth.

“Our priority remains to invest in value-adding growth. We will continue to expand our tier one assets following the $12 billion of major capital project approvals since the start of 2010,” he said.

“We have embarked on Australia’s largest fully integrated mining project through the expansion of our iron ore business in the Pilbara towards 283 million tonnes a year by 2013, and continue to finalise studies into the phase two expansion to 333 million tonnes a year by

2015.

“We now manage the Oyu Tolgoi copper-gold project in Mongolia following a new agreement with Ivanhoe and have agreed a pathway to increase our stake in Ivanhoe to 49 per cent.

“Our long-established strategy of focusing on long-life, cost competitive, expandable assets, together with our increased investment in technology, positions us advantageously to enhance shareholder value over the longer term.”

Rio shares are down 1.1% to $87.68 this morning.