“We believe that China has enjoyed a very steep V-shaped recovery,” CEO Jean-Sébastien Jacques said in a call.

“Today we see it as that the demand for steel and iron ore in China is very, very strong and order books are full,” Jacques said.

That rebound helped it report half-year underlying earnings of $4.75 billion, beating a consensus of $4.36 billion from 16 analysts compiled by Vuma.

The world’s largest iron ore miner declared an interim dividend of $2.5 billion, equivalent to $1.55 per share, up from $1.51 last year, and reconfirmed 2020 production guidance across all commodities.

Rio reported a net profit of $3.32 billion in the six months through June, down from $4.13 billion in the same period a year earlier.

The company’s iron-ore exports rose 1% in the three months through June and it continues to forecast annual shipments of between 324 million tonnes and 334 million tonnes.

“Big questions remain over the trajectory of consumer spending globally in the face of significant levels of unemployment,” Jacques said.

Rio said in its earnings statement that it had taken a $1 billion impairment charge, largely related to four of its aluminium smelters as well as its Diavik diamond mine in Canada.

High power prices forced Rio to close its New Zealand smelter this year and to ask Icelandic regulators to address what it called discriminatory power pricing for its ISAL smelter.

Its Australian aluminium businesses remain under review.

Free cash flow tumbled 28% as the miner spent more on development projects and tax payments, but analysts at Jefferies remained upbeat about its prospects.

Higher metal prices and relatively stable unit costs should help free cash flow improve sequentially in the second half, they said, and suggested Rio could pay a special dividend with its full-year results.

“We have continued to pay the same level of taxes, same level of employment, the same dividend,” Chief Financial Officer Jakob Stausholm told Reuters.

“But for a special dividend, it’s better to wait a moment to make such considerations.”

The company said is working with partners to “reduce capital intensity, lower operating costs and shorten the timetable for development” of the high-grade Simandou iron ore project in Guinea. Fieldwork involving geotechnical investigation and surveying will start in Guinea this half.

Jacques said he will front an Australian Senate enquiry next week over Rio’s destruction of two sacred caves of historic significance in Western Australia.

(With files from Reuters and Bloomberg)