Rio Tinto plc Set To Achieve $2bn Cost Savings

Rio Tinto plc (LON: RIO) reveals its progress at an investment seminar in Sydney.

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The shares of Rio Tinto (LSE: RIO) (NYSE: RIO.US) slipped 16p to 3,215p during early trade this morning after the miner outlined its progress during an investment seminar in Sydney.

The FTSE 100 member provided updates on a number of financial statistics, including operating costs, which the company claimed had been $1.8bn lower during the ten months to October than during the comparable period of 2012.

Rio said operating costs for 2013 as a whole would be $2bn lower.

The miner also stated exploration costs had been cut by $800m during 2013, which exceeded the group’s original target by $50m.

In addition, Rio declared capital expenditure for 2013 would be less than $14bn, with $11bn expected for 2014 and $8bn projected for 2015.

Sam Walsh, Rio’s chief executive, said:

I have set a clear direction for the business to reignite our passion for delivering greater value for shareholders. Our results so far show we are taking decisive action, making tough decisions and advancing at pace.

The outlook for our business is robust and we are strengthening our ability to capitalise on opportunities available to us in the future.

Doubling up Rio’s interim results from August would give 2013 annual earnings of 284p per share, which would support a potential P/E of 11.

RISK WARNING: should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice. The Motley Fool believes in building wealth through long-term investing and so we do not promote or encourage high-risk activities including day trading, CFDs, spread betting, cryptocurrencies, and forex. Where we promote an affiliate partner’s brokerage products, these are focused on the trading of readily releasable securities.

> Maynard does not own any share mentioned in this article.

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