Rio Tinto’s Dividend Announcement Raises Questions on Currency Risks

Rio Tinto's Interim Dividend Announcement

Rio Tinto Limited has declared an interim dividend of USD 1.48 per ordinary share for the six-month period ending 30 June 2025. This dividend is fully franked at the applicable corporate tax rate of 30%, reflecting the company’s strong earnings and commitment to returning value to shareholders.

Key Dates and Payment Details

The ex-dividend date is scheduled for 14 August 2025, with the record date following on 15 August 2025. Shareholders can expect payment on 25 September 2025. Notably, the dividend will be paid in multiple currencies depending on shareholder location and preference, including US dollars, Australian dollars, British pounds, and New Zealand dollars. This multi-currency approach is facilitated through Computershare Investor Services Pty Ltd, Rio Tinto’s share registry, which offers a Global Wire Facility allowing shareholders to elect their preferred currency.

Dividend Reinvestment Plan (DRP) Details

Rio Tinto’s Dividend Reinvestment Plan remains an attractive option for shareholders wishing to reinvest their dividends. The DRP allows participants to acquire shares on-market at the average price of transactions conducted shortly after the dividend payment date, with no discount applied. The deadline for DRP election is 4 September 2025. This plan supports shareholder flexibility and long-term investment without diluting existing shareholdings through new issues.

Currency Conversion and Franking

All dividend entitlements will be converted to Australian dollars to calculate franking credits before being converted to the elected payment currency based on exchange rates as of 16 September 2025. The full franking of the dividend underscores Rio Tinto’s robust tax position and enhances the after-tax return for Australian shareholders.

Market Implications and Shareholder Impact

This dividend announcement signals Rio Tinto’s continued financial strength amid a complex global environment for mining companies. The fully franked dividend and flexible payment options may appeal to a broad base of investors, potentially supporting the stock price ahead of the payment date. However, currency fluctuations remain a variable factor affecting the ultimate dividend value received by international shareholders.