Rio Tinto Australia CEO says mining rationalisation to continue

PUBLISHED : Tuesday, 13 November, 2012, 12:42pm
UPDATED : Tuesday, 13 November, 2012, 12:42pm


Global miner Rio Tinto Ltd expects the recent round of layoffs and cost-cutting in Australia to continue as margins shrink due to rising production costs and falling commodity prices, a top executive said on Tuesday.

“The rationalisation will continue,” Rio Tinto’s Australia chief executive, David Peever, said at a conference.

Rio has been cutting costs, reviewing projects and closing coal mines in Australia, like its peers, all of whom are battling sliding revenue as commodity prices have tumbled, in some cases to three-year lows.

However the company is forging ahead with a $3.7 billion expansion of its iron ore capacity to 353 million tonnes, a project it has long considered the most profitable development in the industry, while smaller rivals have been forced to put their iron ore plans on hold.