News Column

Mining Giant Rio Tinto to Cut Costs, Jobs

Nov 29 2012

Mining giant Rio Tinto Plc said Thursday jobs would go around the world as it sought productivity savings of 5 billion US dollars by the end of 2014.

One billion US dollars would be sliced off the cost of finding and assessing new projects next year.

Chief executive Tom Albanese told investors meeting in Sydney that recent cost increases were "unsustainable," particularly in coal mines in Australia and in its aluminium business.

"The increase that we've seen in capital costs in Australia in the coal industry over the past five years really do need to be rolled back to attract capital," he told reporters.

Chief financial officer Guy Elliott told the gathering that operations that "don't deliver cash flow" might be shut down and predicted "some difficult discussions with labour."

He added: "The escalation of costs that we've seen, well above the rate of inflation ... in particular in Australia, is going to have to stop."

The company did not say how many jobs would be cut.

Source: Copyright 2012 dpa Deutsche Presse-Agentur GmbH