Oct 11 (Reuters) - Australia's Fortescue Metals Group on Thursday announced a share buyback program of up to A$500 million ($353.0 million), joining bigger rival Rio Tinto as the trend of handing back cash to shareholders sweeps the mining industry.
The program will begin after the iron ore miner releases its quarterly report on Oct. 25 and will remain in place for a period of up to 12 months.
The buyback program does not need shareholder approval, the world's fourth-largest iron ore miner said in a statement.
"The share buyback program is a natural extension of our capital allocation focus which has now clearly shifted from debt reduction," Fortescue's Chief Executive Officer Elizabeth Gaines said.
Fortescue's net debt stood at $3.1 billion as of June 30, according to its annual report."The share buyback program is a natural extension of our capital allocation focus which has now clearly shifted from debt reduction."
Across the mining sector, a trend to hand money back to shareholders has gathered steam following a recovery from the mining and commodity crash of 2015-16 and pressure from investors not to waste growing piles of cash on buying up assets that may never deliver returns.
Last month, global miner Rio Tinto said it will return $3.2 billion to shareholders from its sale of Australian coal assets this year in addition to existing buyback programmes.
In August, Fortescue's annual profit halved as prices for its lower quality iron ore fell.
Fortescue has been hit by falling prices for its lower grade iron ore as Chinese steel mills have turned to higher-grade, less-polluting iron ore, but it is clamping down on costs and aiming to grow margins with a new, higher grade product. ($1 = 1.4164 Australian dollars)
(Reporting by Aditya Soni; Editing by Phil Berlowitz)