Aluminium ingots at a lay down area at BSL

Dual listed companies structure

Rio Tinto operates under a dual listed companies (DLC) structure. Since its formation in 1995, this cost effective structure has been designed to, in a tax efficient way, place the shareholders of Rio Tinto plc and Rio Tinto Limited in substantially the same position as if they held shares in a single entity owning all of the assets of both companies. 

Under the DLC structure, the businesses of Rio Tinto plc and Rio Tinto Limited are managed together, the boards of directors of each Company are the same, and shareholders of each Company have a common economic interest in the DLC structure.

We regularly review the company structure to ensure it's providing value, and as recently as 2024, an extensive independent review was conducted. The Board unanimously concluded that the DLC structure continues to be effective and provides benefits to Rio Tinto and our shareholders. 

Collapsing our DLC would be expected to result in:

  • Tax costs in the mid-single digit US$ billions.
  • The share price of a unified Rio Tinto trending down towards the weighted average of the Rio Tinto plc and Rio Tinto Limited share prices, which on average during 2024 was c.14% below the Rio Tinto Limited share price.
  • Significant wastage of franking credits, with Rio Tinto being unable to pay fully franked dividends to Australian holders in the longer term.

Collapsing our DLC is expected to result in:

Tax costs

in the mid-single digit US$B

Unified share price

Likely trending to levels significantly lower than the Rio Tinto Limited share price before DLC collapse

Wasted franking credits

Rio Tinto is unlikely to be able to pay fully franked dividends to Australian holders in the longer term

The Board’s comprehensive review concluded that collapsing our DLC would likely negatively impact shareholder value in the following key areas:

Wasted franking credits

DLC collapse could adversely impact the individual tax position of tax-resident Australian shareholders and the Rio Tinto share price in due course.

  • DLC unification is expected to result in significant “wastage” of franking credits in the future given the >3x increase in franked dividends that would be paid to Rio Tinto shareholders, a large portion of whom would not be expected to benefit from them as they would not be tax-resident in Australia.
  • This would likely leave Rio Tinto unable to pay fully franked dividends in the longer term.
  • The DLC structure means Rio Tinto can use franking credits more efficiently, preserving this benefit for Australian shareholders.

The DLC structure provides for the efficient use of franking credits by allowing for the payment of franked dividends to only Rio Tinto Limited shareholders who are more likely to be Australian tax-resident.

Dual-listed company structure

Risks to share price

The Board believes that following a DLC collapse, it is highly unlikely that the Rio Tinto Limited share price would be maintained at pre-collapse levels and that it is more likely to trend towards the weighted average of the Rio Tinto plc and Rio Tinto Limited share prices. On average during 2024 this was c.14% below the Rio Tinto Limited share price.

Approximately US$50bn of additional incremental demand would be needed from Australian tax-resident shareholders to avoid this – this is significantly more than the average annual equity capital markets issuance in Australia over the last 10 years – at US$27.5bn.
Dual-listed company unified share price effect

Benefits of a dual-listed companies structure

What are the advantages of Rio Tinto’s DLC structure? It delivers shareholder value.

1. Access to global markets

  • The DLC structure provides access to significant depth of liquidity in demand for, and trading of, Rio Tinto shares. 
  • This is achieved through primary listings and premium index inclusion in 2 major capital markets and mining investment centres. 
  • Rio Tinto plc has a pre-eminent position in the UK market as the default investment in the mining sector. 
  • Rio Tinto plc is one of the 10 largest companies and top 5 dividend payers in the FTSE-100 index. 

2. Above industry average shareholder returns

  • Since implementing our shareholders returns policy in 2016, we have consistently delivered cash returns to shareholders at 60% - the upper end of the 40% to 60% range, in line with or above key peers. 
  • Total cash returns to shareholders over the longer term are expected to remain in the range of 40% to 60% of underlying earnings in aggregate through the cycle, as per our policy. 

3. Franking credit tax benefits

  • The DLC structure means we can use franking credits more efficiently.
  • Rio Tinto Limited has paid fully franked dividends to shareholders since the DLC structure formed in 1995 and will continue to do so in the long term under the DLC structure. 
  • We expect a DLC collapse would result in a significant "wastage" of franking credits and may adversely affect the share price of a unified Rio Tinto. 
  • A unified Rio Tinto may not be able to pay fully franked dividends in the longer term, which may adversely affect the individual tax position of Australian shareholders.

4. Provided strategic flexibility for Mergers and Acquisitions (M&A)

The DLC structure has enabled Rio Tinto to raise capital and execute strategic M&A, with its ability to offer equity in either Rio Tinto plc or Rio Tinto Limited to raise capital or use as share consideration in acquisitions to execute strategic M&A. 

  • How would unification impact the distribution of franking credits versus how they are currently distributed?

    Franking credits are currently distributed to Rio Tinto Limited shareholders only through the dividend paid by Rio Tinto Limited. Under a unified structure, instead of franking credits just being distributed to existing Rio Tinto Limited shareholders, the credits would be attached to all dividends, meaning a significant wastage as non-Australian tax resident shareholders cannot use them. In addition, the Board does not believe that Rio Tinto would be able to pay fully franked dividends in the longer term under a unified structure under Rio Tinto Limited. 

  • What would the tax implications be of unification under the Limited line?

    According to detailed analysis undertaken by leading professional services firm EY, unification would generate one-off tax costs of mid-single-digit billions of US dollars. 

  • Has the Board engaged thoroughly on this issue? 

    The Board undertook a comprehensive review of the DLC structure during 2024 with substantial input and advice from leading external financial and legal advisers, including detailed tax analysis undertaken by professional services firm EY. Since that review, there have not been material changes to the underlying facts or circumstances. We have also held several meetings with Palliser Capital, including with our Chairman, Chief Executive and Chief Financial Officer, and carefully considered their perspectives. We value shareholder perspectives and have been, and will continue to engage openly with all shareholders on this topic and others. 

Related content

Employee standing safely next to HME at Gove Operations

Annual general meetings

All the information from our current and past Annual General Meetings
Simandou

Reports

Finding better ways to become the most valued metals and mining business
Conveyor belt between stockpiles at Weipa Operations

Corporate governance

Considering the right things, at the right time, with the right people and insights