Shares in RTZ, the world's largest mining group, jumped 25p to 905p yesterday after the recent surge in minerals prices carried earnings to a record level in the first half of 1995.
The news coincided with the launch in Australia of the $1bn public sale of Lihir Gold, owner of what is thought to be the world's biggest undeveloped gold mine, in which RTZ has a 30 per cent stake.
RTZ reported a 33 per cent increase in pre-tax profits to pounds 570m, which translated into a 59 per cent increase to pounds 384m after tax, but before exceptional items, well ahead of analysts' predictions of around pounds 340m. The market was further encouraged by predictions from RTZ that non-ferrous metals prices such as copper and aluminium would remain firm into 1996, despite a 42 per cent rise in the first half.
The company also announced that Sir David Simon, chairman of British Petroleum, had joined the board as a non-executive director.
Sir Derek Birkin, chairman of RTZ, said supply and demand were in better balance than seen for some years. "Prices have been reflecting this situation and, despite some recent easing, should remain strong."
Reflecting its confidence, RTZ is raising the half-way payment to shareholders by 17 per cent to 10.5p, payable as a foreign income dividend.
The increased earnings were almost entirely due to higher prices, particularly copper, aluminium and molybdenum, which added pounds 161m to the bottom line. Production volumes were up in most of RTZ's main business areas, although in copper, a key contributor, the increase was held to 2 per cent after problems at the Escondida mine in Chile led to a 10 per cent fall in output.
The Lihir Gold flotation, which will be launched in the US in the next few days, is part of a commitment to bring in local investors to the Papua New Guinea-based project.
The float will raise $450m to part-finance a $750m development project for the mine, which is in the crater of an extinct volcano.
RTZ refused to comment on the float for legal reasons.