Analyst Views: What did you make of Rio Tinto’s cost-saving announcement?
29 November 2013 12:55am
HUNTER HILLCOAT INVESTEC
“We already knew about their production target but it will be interesting to see the pace at which they can bring the extra production on board. They’re making a decision on greenfield production at a later stage so they may not end up building new mines if the iron ore price collapses.
PETER MALLIN-JONES CANACCORD GENUITY
“Rio Tinto is expanding production at a lower cost than we estimated. I don’t think this statement will change people’s outlook much as we already knew about the increased capacity. The iron ore price is set to fall over the next few years because of expansions like this, but the ramp-up will be a gradual process.
ROB CLIFFORD DEUTSCHE BANK
“Production will exceed 330m tonnes in 2015, in line with our 333m tonnes forecast but well above market consensus forecasts of around 310m tonnes. This is an extremely positive announcement and we think it should result in upgrades to consensus earnings and valuations.