The Big Boys, page-450

Also his comments here i would question:

With over two-thirds of the world's iron ore industry underwater at current product prices, expect many more such capitulation developments, as a precursor to the iron ore price reaching more economically rational levels.

The price of I/O will continue to fall as the juniors rationalise their operations.  This will directly impact Rio's bottom line.  Markets are forward looking but if they expect falling earnings then they will continue to price that in until such time that there is some light at the end of the tunnel.  Ie; When the juniors start to capitulate.  Right now they are still pumping.

In the mean time, if you own RIO stock now, you get paid a fully-funded 7.5% DY while you wait for the industry pendulum to commence its inevitable swing back closer the equilibrium position.

Dividend doesn't matter so much in a stock that could easily lose you that 7.5% in a day or 2 or SP falls.