Tom Albanese was on bullish form the other day. Never mind the collapsing commodity prices, was his message, our order books are full (whatever that means) and the bull case for the red metal remains copper-bottomed (sorry). True, he mentioned in passing, there are signs of demand weakness, clouds no bigger than a man’s hand so to speak, but nothing to worry about. The share price of Rio Tinto, the company he runs, plunged.

Rio may be among the best in the world at big mining projects, but it is distinctly accident-prone when it comes to finance. More to the point, it hasn’t a clue about valuing its own stock. In his presentation, Albanese reported that the $7 billion share buy-back programme was more than half completed, thanks to determined daily buying in the market. As he did not need to add, the programme has enriched the departing shareholders at the expense of those remaining.

In July, for example, Rio was an enthusiastic buyer-in at over £44 a share. The grateful sellers filled the orders and watched the price slump along with everything else. The presence of this large, determined purchaser did nothing to hold up the slide in the stock. The Rio price is now below £28, a level last seen in August 2010, before the buy-back programme got going.

Dare one say it, but at this level it might actually be worthwhile for the company to buy aggressively. Even with a sagging copper price, the cash is pouring in, and the shares sell on perhaps five times next year’s likely earnings. However, given the record, it would make far more sense for Albanese & Co to give the $7 billion to us shareholders – it’s about $2.80 a share – and let us decide on the right price for the stock. Of course, that would mean no commission for the trading arms of Rio’s banks, who would also be unable to job against a known, price-blind buyer.

In many ways, Albanese is lucky to find that he is still in charge at Rio. From the ill-judged acquisition of Alcan, and the panicky deal to let in the Chinese and the emergency rights issue of July 2009, to the botched tie-up with BHP Billiton, his reign as ceo is a catalogue of financial errors. Stick to mining, Tom, you’re well enough rewarded. Leave buy-backs to Warren Buffett, and let the shareholders decide what to do with the profits.

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