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Demand for the metals needed for the energy transition and a falling iron ore price are encouraging Rio Tinto and BHP to expand investment and production, analysts say, with the big dividends shareholders have come to expect likely to take a hit.
Analysts expect the bullish momentum for the safe-haven asset to continue amid sinking investor appetite for risk, with prices buoyed by an expected peak in US interest rates and a weakening US dollar.
Although more Australian companies are paying dividends in 2023, many have reduced payouts, with the year-to-date total slightly behind 2022’s figures, according to CommSec research. The big miners are leading the cuts, while energy producers are lifting dividends to reflect record high gas prices.