Rio to slash costs by $5bn

City A.M. Reporter
GLOBAL miner Rio Tinto said last night it will slash costs by $5bn over the next two years as commodity prices tumble, but said it was cautiously optimistic on China’s outlook and was sticking with plans to expand its lucrative Australian iron ore operations.

Rio said it is aiming to cut more than $5bn of operating and support costs by the end of 2014, and would cut spending on exploration and evaluation projects by $1bn over the rest of 2012 and 2013. Much of the cost cuts would come in its coal and aluminium assets, chief executive Tom Albanese said at the investor seminar. It also plans to cut spending on sustaining operations by more than $1bn.