Rio Tinto Group Double Capital Expenditure in 2010
October 30th, 2009 | File Under : Coal - Companies - Mining Exploration
Rio Tinto Group, the world’s third- largest mining company, will double capital expenditure in 2010 after cutting net debt by 42 percent in the first nine months of this year.
Spending will rise to between $5 billion and $6 billion, up from previous guidance of $2.5 billion, the company said today in a statement ahead of an investor briefing at 2 p.m. in London. Net debt dropped to $22.3 billion at Sept. 30 and the company is on schedule to reduce operating costs by $2.5 billion next year, Rio said.
Rio cut 16,000 jobs, sold assets and curbed spending after the global recession curbed demand for metals. The company also grappled with borrowings that ballooned after its $38.1 billion purchase of Canadian aluminum producer Alcan Inc. in 2007. In June, London-based Rio spurned a $19.5 billion investment from Aluminum Corp. of China in favor of a $21 billion share sale and the formation of an iron ore venture with BHP Billiton Ltd.
The funds from the rights offer allowed Rio to continue with its growth projects, which include the expansion of the Yarwun alumina refinery, the Kestrel coking coal mine and the Clermont thermal coal mine, Chief Executive Officer Tom Albanese said in August.
The company is studying increasing iron ore production in Australia’s Pilbara region to 330 million metric tons a year, up from its previous guidance of 320 million tons, Rio said today.
Earlier this month Rio, the world’s second-largest exporter of iron ore, raised its 2009 forecast for output of the steelmaking raw material, saying production will increase by as much as 7.5 percent as demand recovers.
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