The Rio move means that four big Australian miners, Rio Tinto, BHP, Fortescue Metals Group and South32, have unveiled more than $US9.16 billion ($A11.5 billion) of shareholder dividends and extra share buybacks in just the last few weeks.

Rio's announcement coincides with a $US2 billion flush of dividends it is now paying to shareholders via the record interim dividend ($US1.10 per share) it announced when it released its half year underlying profit of $US3.94 billion ($4.95 billion). Combined, the four miners will pay $US5.41 billion in dividends by mid-October.

The buyback announcement has come quickly, given Rio's bumper payday - when it received $US2.45 billion in cash from China's Yancoal for Coal & Allied - was only three weeks ago.

The buyback news was welcomed by the market, retail shareholders and analysts, with the stock jumping 47 cents on Friday, to close at $65.97. The stock rose even though iron ore prices fell sharply on Thursday, with the benchmark price for a tonne of iron ore delivered to Qingdao in China falling $US3.56 to $US66.09 per tonne. BHP fell 0.15 per cent on Friday to $25.95 as the broader market rallied.

"Returning the $US2.5 billion proceeds from our Coal & Allied divestment shows our continued commitment to delivering superior value and returning cash to our shareholders," Rio Tinto chief executive Jean-Sebastien Jacques said in a statement.

Mr Jacques, who was recently in Australia to open Rio's latest iron ore mine in the Pilbara, known as Silvergrass, also emphasised the scale of Rio's cash distributions, highlighting the $US8.2 billion of returns to shareholders announced this year.

"Shareholder returns of this scale are made possible by maintaining the strongest balance sheet in the sector and a disciplined capital allocation process," he said.

The news from Rio came as the Fitch Ratings agency released a report affirming its long-term issuer default rating on BHP at A+. But it said that the outlook was negative partly because of the pressure on the miner to boost returns to shareholders from activist investor Elliott Management.

"The Negative Outlook reflects the emergence of several factors which if realised could result in a lower rating. In addition to a potentially weaker operating profile if the US shale assets are sold (weaker future growth profile, reduced commodity diversification), we are concerned that the presence of an activist shareholder on the company's register could result in an increased level of shareholder-friendly measures such as share buybacks and/or special dividends," it said.

The Rio buyback means it has now unveiled a total of $US8.2 billion of cash returns to shareholders around the world this year, made up of $US4.2 billion in dividends, and $US4 billion of buybacks.

Rio will allocate about $US560 million ($700 million) for the purchase of Australian-listed shares via an off-market buyback tender, which it hopes to complete by the end of the year. The record date for determination of shareholders of Australian-listed shares entitled to participate in the buyback is September 28 (7pm).

The tender period will open on October 11 and close on November 10. Rio said buyback proceeds would then be dispatched to participants on November 20.

The remainder of the buyback funds, about $US1.9 billion, will be used to buy Rio's London-listed shares. The on-market purchase of London-listed shares will start on December 27, and be completed by the end of 2018.

Rio's buyback of Australian-listed shares was "likely to be upsized," Citi analyst Clarke Wilkins said in a note after the news emerged.

He also said: "Previous off-market buybacks have achieved a 14 per cent discount and typically been upsized due to the strong demand. Companies are able to achieve these discounts through off-market buybacks in Australia as part of the proceeds are deemed to be a return of capital (A$9.44/share in this case), with the balance a deemed fully franked dividend (allows streaming of franking credits to those that can use them)."

The buyback was welcomed by Duncan Seddon from the Australian Shareholders' Association, who said he liked seeing money flow back to shareholders following an asset disposal.

"The problem we've had over the last decade or so is that many of these miners, when they've sold an asset, have gone and frittered it away," he said.