"Rio Tinto has restored its dividend and more than halved its net debt, the mining group reported on Thursday, marking a transition from extreme financial stress to stability despite falling profits – or losses – in most of its commodity divisions.

The indictment of four China-based employees on alleged bribery charges on Wednesday marred Rio’s results. It underlined the added pressures the miner faces in a sector that is still in a fragile state of recovery after the crash in industrial metals prices that started in October 2008.

But Rio Tinto Alcan, its aluminium division, fell to a net loss of $578m compared with net profits of $1.27bn in 2008. The loss was weighted toward the first half, with a $111m gain in the second half attributable to higher aluminium prices and an ongoing cost-cutting programme. Aluminium remained the biggest drag on Rio’s group earnings.

A lower tax bill helped the company raise its net profits year on year, and diluted earnings per share were $2.753 compared with $2.331. Pre-tax profits, however, fell 14 per cent to $5.78bn.

Rio’s debt levels in 2009 sent the company on a fundraising odyssey that ended in June, when it scrapped a controversial $19.5bn deal with China’s Chinalco and instead opted for a $15.2bn rights issue. Its keenly watched net debt more than halved from $38.7bn to $18.9bn, after proceeds from its rights issue and a slew of asset disposals. Gearing is now 29 per cent.

Rio confirmed that Stern Hu, its lead iron ore salesman in China, and three of his associates, had been charged with allegedly receiving bribes and “stealing commercial secrets” most likely related to the Chinese steel industry, which is the biggest consumer of iron ore. The four will be tried in Shanghai, but no date for the trial has been set.

The case continues to be watched by blue-chip companies and foreign ministries around the world, but did not appear to dent Rio’s most important source of income: Australian iron ore sales to China.

Iron ore remained by far Rio’s most important division, with net profits of $4.13bn last year compared with $6bn in 2008. Its key iron ore operation in western Australia set a new production record of 204m tonnes, 19 per cent above 2008. The company is studying how to raise production to 330m tonnes by 2015, possibly by completing its controversial “operations-only” iron ore joint venture with BHP Billiton, a rival producer.

Rio is entering a new contract iron ore pricing round as the spot price is above $120 a tonne, about double the benchmark contract price left over from last year’s contentious negotiations. This suggests that it could agree a significantly higher benchmark price this year and expand its iron ore profits proportionately.

The company offered a final dividend of 45 cents after suspending the interim dividend in line with all its main competitors except for BHP. The total dividend for 2008 was $1.1122. Rio’s final dividend is now its total dividend.

”The board expects Rio Tinto Limited to be in a position to pay fully franked dividends for the reasonably foreseeable future,” the company said, referring to the Australian component of the dual-listed company.

Rio offered an outlook statement that was less cautious than recent reporting periods.

”We have witnessed a substantial recovery in the pricing of most of our key commodities over the past 12 months, driven largely by government measures in response to the global financial crisis,” it said.

“Looking forward, we believe that the factors that drove price recovery in 2009 will continue through 2010. We expect that China will grow at over 9 per cent and the emergence of the [Organisation for Economic Co-operation and Development] countries will provide further support.”

However, it echoed recent comments by rivals Xstrata and BHP, saying: ”We are mindful that the wind-down of stimulus packages across the globe and speculative asset bubbles could produce volatility.” It separated volatility on the surface, however, from an underlying industrial recovery that should push metals prices higher over the long term.

Lower commodity prices alone, Rio said, wiped $6.88bn off its earnings in 2009 compared with 2008, when the commodities boom peaked.

Gross sales revenues fell from $58bn to $44bn.

Rio’s London-listed shares gained 4 per cent to £32.69 in mid-morning trading."

Inca.