Wednesday, April 16, 2014

Walsh taking Rio 'back to the future'

Chief executive Sam Walsh says since taking over the reins of Australia's biggest producer of iron ore he has been 'taking Rio Tinto back to the future'.

Over the past 12 months Rio has worked to boost production from its global mines, slashed operating costs and sold non-core assets.

'This time last year I set out our plan to transform Rio Tinto into a company once again driven by creating greater value for our shareholders,' Mr Walsh told the company's annual general meeting in London.

'Upon reflection I have termed our journey over the past year as 'taking Rio Tinto back to the future'.

'And our financial results indicate that we are moving in the right direction.'

Mr Walsh, addressing his second London AGM as chief executive, told shareholders Rio was now stronger, leaner and more determined.

The miner was working to ensure the changes were sustainable.

Earlier on Tuesday, the world's second largest miner and iron ore producer blamed cyclone Christine in the Pilbara for affecting March quarter production which totalled 66.4 million tonnes of iron ore.

That was six per cent lower than in the final three months of 2013 but still a record high for a first quarter and up eight per cent on a year ago.

Rio Tinto completed five major projects during 2013 which Mr Walsh said had already started to deliver results.

They included the first phase of the Pilbara iron ore expansion in Western Australia, shipment of copper concentrate from the Oyu Tolgoi mine in Mongolia and the extension and expansion of the Kestrel coal mine in Queensland.

There was also the move from open pit to underground mining at Argyle diamonds in Western Australia while in September the first hot metal was produced from the AP60 plant in Quebec.

'Of course we can always make improvements in everything that we do, including project delivery,' Mr Walsh said on Monday.

'However, the five capital projects we have delivered will support our continued growth in the years to come.'

Mr Walsh said Rio's 'breakthrough' iron ore expansion to 360 million tonnes a year was an 'exciting opportunity to grow our industry-leading iron ore operation in the Pilbara'.

The chief executive said it would save more than US$3 billion of capital compared with previous plans.

There were also 'significant options for growth in our copper business', he said.

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