Rio Tinto announces billions in cuts

Mining giant Rio Tinto said it was targeting five billion dollars of cost savings by the end of 2014 as it voiced 'major uncertainties' about the future growth of the US and Europe.

Mining giant Rio Tinto said it was targeting five billion dollars of cost savings by the end of 2014 as it voiced 'major uncertainties' about the future growth of the US and Europe.

The company said planned spending on exploration and evaluation projects would be reduced by $1bn over the remainder of 2012 and 2013.

Capital expenditure on approved and sustaining projects will taper off from current levels in 2013, while sustaining capital expenditure will drop by more than $1bn next year.

The news was welcomed by investors, who pushed shares up 4.5% by 13:30.

"We are taking further tough action to roll back the unsustainable cost increases of the past few years and are maintaining a relentless focus on improving productivity," said Chief Executive Tom Albanese.

"The short-term macroeconomic outlook remains volatile, with major uncertainties around future US and European economic growth," he said.

However, the firm added it was " guardedly optimistic" on China's prospects, forecasting a light rise in Chinese GDP growth to above eight per cent next year.

It is eyeing strong future earnings potential from iron ore volume increases and higher-priced new titanium dioxide contracts.

Recommended

Britain’s ten most-hated shares – w/e 9 August
Stocks and shares

Britain’s ten most-hated shares – w/e 9 August

Rupert Hargreaves looks at Britain's ten most-hated shares, and what short-sellers are looking at now.
10 Aug 2022
Aviva: One for income investors to tuck away
Share tips

Aviva: One for income investors to tuck away

Insurance giant Aviva is one of the highest yielding stocks in the FTSE 100 – and it’s cheap, too, making it a tempting target for income investors. R…
10 Aug 2022
Director dealings w/e 5 August: what company insiders are buying and selling
Stocks and shares

Director dealings w/e 5 August: what company insiders are buying and selling

Directors’ share dealings can often give investors an insight into the sentiment of company insiders. Here are some of the biggest deals by company di…
9 Aug 2022
Britain’s most-bought shares w/e 5 August
Stocks and shares

Britain’s most-bought shares w/e 5 August

A look at Britain’s most-bought shares as of 5 August, providing an insight into how investors are thinking and where opportunities may lie.
9 Aug 2022

Most Popular

Are UK house prices finally heading for a crash?
House prices

Are UK house prices finally heading for a crash?

The latest house price figures show a fall of 0.1% in July. With interest rates rising, inflation hitting double figures and a recession on the cards,…
5 Aug 2022
Brace yourself for the return of rationing
Economy

Brace yourself for the return of rationing

Russia is turning off the cheap energy. That is already leading to belt-tightening, says Matthew Lynn. Who will suffer most, and which sectors will th…
5 Aug 2022
Fear of missing out – what should investors do now?
Investment strategy

Fear of missing out – what should investors do now?

Markets have rallied from their mid-June lows. But if you missed out, as most investors did, what should you do now? Max King explains.
8 Aug 2022