How good it feels to be growing again. After saddling itself with a mountain of debt to buy Alcan for $38bn at a time – 2007 – when warning lights about the global economy were already flashing, Rio Tinto has rediscovered the joys of mining. A 125 per cent jump in net underlying earnings to $5.8bn in the six months to June 30, driven by strong iron ore demand and higher prices, is one thing. More striking, if you are a Rio shareholder with a brow furrowed from looking too long at its balance sheet, is the company’s ability to generate cash – $9.9bn in the period. That, plus last year’s $15bn rights issue and a series of targeted disposals, allowed Rio to cut its debt from $39bn a year ago to $12bn.

The message on Thursday was that the debt-financed era into which Rio plunged with Alcan was over. To be fair, the aluminium business moved back to a net profit of $358m after a loss of $689m in the same period last year. Chief executive Tom Albanese’s focus now, however, appears to be to take advantage of an optimistic assessment of global growth, including a forecast of 9 per cent for China next year, to boost capital expenditure, with $13bn of capex planned between now and the end of 2011. Much of it will be spent on expanding and developing existing and new iron ore projects.

That is all meat and drink to a global mining leader. But it may not fully satisfy Rio’s shareholders. Rio shares trade on a 2011 earnings multiple of under 6 times, cheap relative to its competitors. With its gearing now back to 20 per cent, some investors may feel they deserve a buy-back. Mr Albanese should ignore them; for now, there should be ample reward in Rio’s growth prospects.