(Bloomberg) -- Rio Tinto Group is raking in cash from a resurgence in iron ore and has one of the mining industry's strongest balance sheets, but Chief Executive Officer Jean-Sebastien Jacques says he's not ready to start chasing deals.
“We will grow, but we will not grow at any cost,” Jacques said in an interview with Bloomberg Television. “If we find the right opportunities, we have the balance sheet to do whatever we want, but it's about creating value for shareholders.”
The mining industry is still haunted by years of overspending on deals and new mines, which created a mountain of debt that brought some of the biggest names to their knees in 2015. Shareholders paid the price as equity values collapsed and dividends were cut. Now, with the business on the upswing again and profits flowing, CEOs say their focus is returning cash to shareholders, not new acquisitions.
Rio, which released its half-year results on Wednesday, promised to pay a record $2 billion interim dividend and increased its stock buyback target by $1 billion.
Read more: Rio Rewards Investors With More Cash on Iron Ore Rebound
Anglo American Plc surprised investors last week by reinstating its dividend. CEO Mark Cutifani said the company was once again looking at opportunities to grow.
Glencore Plc has been the most ambitious by inking several deals in the past year, including agreeing to buy a stake in Australian coal assets last week.
“When I look at the valuation of recent transactions, it's a very good price for the seller,” Jacques said. “Unless we are convinced, because of a lot of synergies for an example, we're not going to move.”
To contact the reporters on this story: Thomas Biesheuvel in London at tbiesheuvel@bloomberg.net, Jonathan Ferro in London at jferro10@bloomberg.net.
To contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Liezel Hill
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