Anglo American Plc, the world's third-largest miner, will hand back an extra $5 billion to investors after meeting forecasts with a 44 percent rise in first-half earnings on Friday, lifting its shares 5 percent.
The gold, platinum and copper specialist also said it was upbeat about the sky-high metals prices that underpinned its results and looked forward to a strong second half if they hold at current levels.
Underlying earnings per share (EPS) rose to $1.70 for the six months to end-June. A poll of analysts taken by Anglo had expected between $1.61 and $1.85 pence.
The company plans an additional $4 billion share buyback and a $1 billion special dividend worth 67 cents a share, which some analysts had expected to come much later.
Anglo already has an outstanding $2 billion buyback, which started in March and is almost complete. It also in February revealed plans for a previous special dividend worth $500 million, or 33 cents a share.
By 1054 GMT, Anglo's London-listed shares were up 5.17 percent at 2,338 pence, after trading as high as 2,343p, valuing the business at 35 billion pounds ($66 billion) and lifting other miners such as BHP Billiton Plc. The real surprise of these results ... is the $5 billion capital return for the remainder of the year, said UBS analyst Paul Galloway in a note.
This significantly exceeds the return from Rio Tinto, which appears to be hoarding cash, and the comparison is very favorable.
JPMorgan analyst Ross Gardiner was delighted with the special payout: This, we believe, is a critical aspect that could set Anglo apart from its peers; it pays out its windfalls.
REVAMP COULD TAKE YEARS
Operating profit before exceptional items increased 52 percent to $4.56 billion for the half-year from $2.99 billion previously.
The interim dividend rose 18 percent to 33 cents.
Anglo's chief executive said the restructuring plan announced last year could take up to three years to complete but he hoped the main elements would be wrapped up before then.
A main part of this, Anglo said, was to exit its AngloGold Ashanti stake in an orderly manner.
It could take two to three years ... though we would expect the main elements to be done within six and nine months, CEO Tony Trahar told reporters on a conference call.
Anglo said the revamp, which is aimed at focusing on core mining activities, had made good progress to date, and though it gave little new detail, the company said it would keep looking out for potential acquisitions.
However, it was upbeat on the outlook for platinum, gold and other metals prices for the second half of this year.
I think the outlook for platinum is extremely sound, with demand in industrial jewelry and auto catalysts underpinning it, Anglo's Trahar said.
The outlook for gold in this changeable currency environment as a hedge against inflation also looks more positive than it has been for 10 or 15 years, Trahar said.
Booming global demand led by China's rapid industrialization has sent the prices of metals such as copper, zinc and aluminum through the roof, taking miners' profits with them, while 'safe-haven' dollar-priced gold has benefited from Middle East tension and a weakened U.S. currency.
Anglo reported operating cash flow of $3 billion and net debt of $2.3 billion, down from $2.7 billion.
It said plans to de-merge its Mondi paper and packaging unit were being developed and it hoped to announce more on this before the year-end.