Citigroup (NYSE:C) Sees Possible $10 Billion Share Buyback by Rio (NYSE:RIO)

Citigroup (NYSE:C) said they believe Rio Tinto (NYSE:RIO) could launch a $10 billion share buyback sometime in 2011 while maintaining their capex project for its mine projects.

“We expect Rio to move into a net cash position in 2011. This will allow the company to look at growing through M&A or returning cash to shareholders through buybacks,” Citigroup wrote in a note.

After the takeover of Alcan in 2007, Rio Chief Executive Officer Tom Albanese has worked on paying down the debt from the deal and profits increased as metal prices, along with coal and iron ore, went up.

Citigroup estimates net cash for Rio Tinto to be $9.4 billion in 2011, and increasing to $23.9 billion in 2012. Capex is expected to reach $9 billion in 2011.

Rio said their focus is on investing in areas that will add growth to the company.