Mining shareholders want bigger rewards

Global miners are set to double their profits for the December half, thanks to booming iron-ore and copper sales.

But this has sparked calls for big returns to shareholders as takeover opportunities run out.

BHP Billiton, Rio Tinto, Anglo American and Xstrata are so flush with cash not even their biggest expansion projects can soak it up.

"Capex is back to all-time highs, gearing is approaching all-time lows, free cash flow yields are close to double figures, yet payout ratios and dividend yields are at 10-year lows. Something must give," a Credit Suisse analysts said in a note this week.

The main headwinds are rising labour, materials and energy costs and expansion projects. These factors and the prospect of takeovers could dash hopes for big increases in dividends or share buy-backs.

BHP is tipped to post a first-half attributable net profit before one-off items of $10.3-billion, up from $5.7-billion a year ago, on February 16.

On February 10, Rio Tinto is expected to report an $8.2-billion net profit for the December half versus $3.7-billion a year earlier, according to Thomson Reuters. The consensus for the full year is $13.97-billion.

On February 18 Anglo American is expected to report that full-year net profit doubled to $4.98-billion, while Xstrata is expected to post an almost 90% surge in full-year net profit to $5.19-billion on February 8.