Rio Tinto has all but committed to keeping its August promise to hand over decent cash returns to shareholders despite a falling iron ore price.

The world’s second largest miner has been facing criticism for contributing to an over-supplied iron ore market.

West Australian Premier Colin Barnett, whose government relies on mining royalties, accused Rio and BHP Billiton in parliament of colluding and damaging the economy by producing more product into a declining, soft market.

Rio chief executive Sam Walsh told a conference in Sydney he did not know where Mr Barnett was coming from as the government had approved its plans.

He also said the industry was cyclical and would recover because demand would continue to be very strong through the urbanisation of developing countries.

Rio’s planned expansion to 360 million tonnes a year – now 75 per cent complete – was poised to generate significant value for shareholders.

“Our strategy of focusing on long-life, low-cost assets means we will continue to generate strong cash flows despite a lower price environment, resulting in materially increased and consistent cash returns to shareholders,” he said.

An extra incentive to keep investors onside is to help it fend off any new advances from Glencore, after it recently rejected a merger approach.

RBC Capital Markets analyst Chris Drew said it was interesting that Mr Walsh remained committed to delivering on the promise of returns this year.

“There had probably been a few question marks raised around their ability to deliver on capital management given the weaker iron ore price,” he told AAP.

The consensus among analysts was that Rio would conduct a share buyback, but it could also offer a special dividend or franking credits.

Analysts also backed comments by Rio’s chief executive of the iron ore business, Andrew Harding, that if Rio was not aggressively expanding production then other miners overseas would fill the void, costing Australia revenue.

“They try to act in the best interests of shareholders, not rival companies, which is their fiduciary duty,” Morningstar analyst Mark Taylor said.

“If they lower their costs through expanding production to ensure the longevity of their margins, why wouldn’t they do it?”

Rio said it was on track to meet its guidance of iron ore shipments of 300 million tonnes in 2014 and production of 295 million tonnes.

It shipped 78 million tonnes of iron ore during the September quarter, more than the record 76.8 million tonnes it produced, in line with expectations.

The iron ore spot price has plunged about 40 per cent this year, but has climbed back above $US80 a tonne this.

Rio’s copper production result was well above expectations, despite well flagged maintenance at its US Bingham mine and operational issues at Oyu Tolgoi in Mongolia.

It increased copper guidance from 585,000 mined tonnes to 615,000 and 260,000 refined tonnes to 300,000 driven after improved recoveries at the US mine and the sustained ramp up at Oyu Tolgoi.