Anglo-Australian mining giant Rio Tinto yesterday posted a 125 percent jump in its first-half earnings to US$5.8 billion, citing recovery in its key markets.
Chief executive Tom Albanese said the results were a first-half record.
“We’ve reaped the benefits of the cost reduction efforts implemented in 2009 and we have been pushing our production hard to benefit from a strong pricing environment, leading to record first-half cash flows,” he said in a statement.
Rio said its relationship with China was a critical one, but warned that despite predictions of global economic growth this year and next, the economy “will be volatile.”
“Developing our relationship with China is a key priority for Rio Tinto,” chairman Jan du Plessis said.
He said the “outstanding” first-half performance was because of higher commodity prices, which added US$3.77 billion to underlying earnings compared with the same period last year. Du Plessis also attributed the results to cost reduction efforts, which slashed Rio Tinto’s net debt to US$12 billion from US$39 billion in June last year.
Rio said it had renewed its focus on growth, with US$3 billion approved since January for projects including the expansion of Western Australia iron ore operations and a joint venture with Chinalco at the Simandou iron project in Guinea.
“Growth is the first priority for our cash flows,” said Albanese, noting expansions or development underway in Canada, the US and Mongolia.
Chinese growth is tipped to be 9 percent, with “positive implications for metals and minerals markets,” but Albanese warned that “economic conditions on a global scale will be volatile” for the next 18 months.
“Our longer-term view remains that industrialization and urbanization, followed by India, will drive robust commodity demand growth,” Albanese said.
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