Anglo-Australian mining giant Rio Tinto Plc's (RTNTF.PK,RIO,RIO.L,RTPPF.PK) Chief Executive Sam Walsh, at the company's Annual General Meeting, said Thursday that the firm's efforts in 2013 will be in four key areas, including cost reduction and divesting assets that are not core to its strategy. The company targets cumulative cost savings of $5 billion, over the next two years, compared to 2012.
According to Walsh, Rio Tinto will focus on cost reduction and productivity improvement across all aspects of its business. However, the firm expects continuing volatility in the short and medium term.
Rio Tinto will focus on delivering approved growth projects, and strengthening capital allocation and discipline.
The company is on track to deliver its Iron Ore expansion plans in the Pilbara, and said its Oyu Tolgoi project is due to start shipping to customers in the first half of 2013. This will depend on the ongoing discussions with the Government of Mongolia, where constructive progress is being made, Walsh stated.
Further, the company is targeting cash proceeds from divestments, and various potential non-core assets are under review for divestment. This is in addition to the earlier-announced Pacific Aluminium and Diamonds.
The board aims to invest only in the best opportunities to deliver attractive returns that are well above the company's cost of capital. Walsh added that Rio Tinto wants to deliver value for the next 140 years and beyond.
RIO.L is currently trading at 3,097.5 pence, down 0.11 percent.
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