Brazilian mining giant Companhia Vale do Rio Doce (NYSE:RIO) is sharing the wealth — proposing a 27% increase in dividends, to US$1.65-billion, for shareholders in 2007.
CVRD is a well known name in the Canadian mining community. In October 2006, the world's largest ore producer closed a US$17.6-million deal to take control of Canadian nickel producer Inco Ltd.
Senior management at CVRD approved the proposed payment that will be made in two equal installments on Apr. 30 and Oct. 31. The US$1.65-billion works out to about US68¢ for each outstanding common and preferred share.
Shareholders will be paid in Brazilian reals, converted to the U.S. dollar.
“From 2001 to 2006, total return to CVRD’s shareholders was 42.7% per year, reflecting the value creation process embedded into the execution of the Company’s long-term strategy," CVRD said in a statement. "Despite the significant increase in our share prices, the return of capital to shareholders through dividends resulted in an average dividend yield of 4.7% p.a. over this period.”