The total payout, amounting to US$9bn, represents 72% of underlying earnings.
It also updated its ore assessment after removing 54mln dry tonnes from reserves at the Pilbara mine to protect historical aboriginal sites which it blasted last year.
The FTSE 100 group said it is working to restore trust with the Puutu Kunti Kurrama and Pinikura (PKKP) people after dynamiting heritage areas at the mine to access iron ore, though it said it does not “underestimate the time and effort it will take”.
The Pilbara developments counted 3 billion tonnes of iron ore at the end of 2020.
The miner said a higher Australian dollar is expected to push capital expenditure to US$7.5bn this and next year, compared to US$7bn spent in 2020.
Pilbara will require US$1.2-1.6bn of sustaining costs, although Rio Tinto does not expect to incur further COVID-19 costs in 2021.
The firm said it will continue to monitor and adjust production levels and product mix to meet customer requirements in line with potential COVID-19 related disruptions.
Iron ore shipments and bauxite production guidance remain subject to weather and market conditions.
Rio Tinto also set some scope 3 emissions targets after announcing its climate strategy a few months ago.
These include cutting steelmaking carbon intensity by a third from 2030 and potentially making it carbon neutral by 2050, reaching net-zero emissions from shipping products by 2050 and meeting the International Maritime Organisation goal of reducing 40% of shipping carbon intensity by 2030.
In the year to December 31, consolidated sales revenue rose 3% to US$44.6bn, with underlying earnings (EBITDA) up 13% to US$23.9bn. Net debt was cut to US$664mln from US$3.6bn in 2019.
Shares rose 3% to 6,432p early on Wednesday.