Anglo American took its share buyback programme to $10.5 billion (£5.5 billion) today and upped the dividend by 20 per cent after unearthing record annual profits.

Tony Trahar, the chief executive, said the mining giant would boost what was already one of the “highest levels of capital return in the industry” by handing an additional $3 billion back to investors this year.

It came as Anglo revealed it would push on with the demerger of Mondi, its paper and packaging division, this summer, but would retain Tarmac, its industrial minerals business.

Mr Trahar said: “We think it’s a very good business.”

Strong production and sky-high commodity prices saw operating profits across the group soar 54 per cent to an all-time high of $9.8 billion in the year to December 31.

And Mr Trahar dismissed fears that the commodity boom could be running out steam by assuring that the burgeoning Chinese and Indian economies would offset weaker US growth in 2007.

“The decline in global growth from the strong level achieved in 2006 should be fairly modest,” he said. “This should provide a supportive climate for commodities in the near term.”

Shareholders will pick up a full-year dividend of 108 cents per share, up 20 per cent.

Mr Trahar is stepping down in the next few weeks to be replaced by Cynthia Carroll.

His departure has been marked by a radical overhaul of the business, with Anglo selling down its stake in AngloGold Ashanti and restructuring Tarmac.

Anglo said plans for a full demerger of Mondi were on track, with South African authorities giving the go-ahead for a dual listing in London and Johannesburg.

Mondi is likely to float as a separate entity in the middle of the year. Anglo said it would not keep any shares.

Mr Trahar refused to comment on speculation that the Egyptian billionaire Sawiris brothers are planning a bid for Tarmac.

He added the group was “not actively” considering plans for a sale.

Production across Anglo American rose for platinum, copper, zinc and nickel, iron ore and coal last year with the group’s Platinum business recording record profits of $2.4 billion, up 181 per cent.

Anglo currently has nearly $7 billion worth of mining projects under development including the Barro Alto nickel mine in Brazil.

The group has another $10 billion to $15 billion worth of unapproved projects in the pipeline.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax