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Rio Tinto shares soar

Mining giant Rio Tinto's shares have hit a six month high as investors welcomed the company's massive cash return to shareholders.

Rio has launched $US2 billion share buyback and also increased its dividend by nearly 10 per cent after lifting annual profit 78 per cent to $US6.5 billion.

Higher dividends and the buyback, to be conducted in 2015, will return about $US6 billion to Rio's shareholders.

The company's Australian-listed shares soared by five per cent in early trade on Friday, and at 1100 AEDT were still up $2.89, or 4.8 per cent, at $62.79, their highest price since early September.

Rio's london-listed shares gained 2.3 per cent overnight.

The miner's net profit growth was primarily a result of lower one-off losses compared to 2013 when its results were weighed down by multi-billion dollar writedowns on copper and aluminium assets.

Its underlying profit was dented by diving commodity prices, though it still beat market expectations at $US9.3 billion.