RIO TINTO beat forecasts by posting a record 125 per cent annual jump in first-half profit yesterday, and committed to stepping up spending on growth projects.
The world’s second biggest iron ore miner announced pre-tax profit of $5.8bn (£3.6bn), ahead of consensus predictions of $5.5bn, while cash flow from operations rose 78 per cent year-on-year to $9.9bn.
“We reaped the benefits of cost-reduction efforts implemented in 2009 and have been pushing our production hard to benefit from a strong pricing environment,” said chief executive Tom Albanese.
The firm said it plans to spend at least $6bn this year to fund projects including the $1.5bn expansion of iron ore mining in Pilbara in Western Australia.
Earnings from iron ore, Rio’s biggest business, more than doubled to $4bn. Aluminium mining, which has dragged on the firm since it took over Alcan three years ago, moved back into the black with net earnings of $358m.
The firm also said it has received a binding offer for a 61 per cent stake in Alcan Engineered Products, excluding the cable division, to funds at Apollo Global Management and FSI.