Australia-based miner Rio Tinto has announced that it expects its capital expenditure to be down by 20 percent in 2013 compared to the previous year, amounting to less than $14 billion. Total capital expenditure is forecast to be reduced to $11 billion in 2014 and to around $8 billion in 2015, reflecting a 20 percent reduction year on year.
Rio Tinto also stated that it is on target to cut $2 billion of costs in the current year, adding that it has already achieved a $800 million reduction in exploration and evaluation spending in the 10 months to October, exceeding the 2013 target of $750 million.
Rio Tinto plans to optimize Western Australian iron ore growth from an annual production rate of 290 million mt per year to at least 330 million mt per year in 2015, at a capital cost of $120-130/mt with an overall capital expenditure saving of more than $3 billion. Production will reach more than 350 million mt in 2017.
"Over the longer term, I remain optimistic about demand for our products. China's urbanization will continue and the development of other economies as they continue to grow at pace, such as India, Vietnam, Indonesia, the Philippines, the Middle East, the former Soviet Union, South America and Africa, will also contribute to ongoing demand for our products," said Rio Tinto CEO Sam Walsh.