Rio's Walsh 'exceeds expectations'
Rio Tinto chairman Jan du Plessis has hailed Sam Walsh's first year as chief executive, saying he had exceeded expectations in cutting ongoing costs and refocusing the company's business in his first year in the top job.
Speaking at the company's London annual meeting last night, Mr du Plessis credited Mr Walsh's moves to turn around the company's cost profile with an improvement in its credit rating in February, saying the focus for 2014 would be more of the same.
"Our focus for 2014 will be to continue to pay down debt and further strengthen the balance sheet and I expect net debt to fall further during the course of the year," he said.
Mr du Plessis stressed the outlook for the global economy was still subdued.
"Tensions remain in Europe, and the pace of reform and structural re-adjustments is slow," he said.
"The combination of low interest rates, low growth and low inflation leaves that continent with considerable challenges.
"And in the US, the unwinding of quantitative easing represents uncharted territory."
Speaking after Mr du Plessis, Mr Walsh said he viewed his first year in the job as one of "taking Rio Tinto back to the future".
"The five capital projects we have delivered will support our continued growth in the years to come," he said.
"Our breakthrough iron ore expansion to 360 million tonnes a year is an exciting opportunity, to grow our industry-leading, iron ore operation in the Pilbara. It will save more than US$3 billion of capital compared with previous plans.
"And we have significant options for growth in our copper business. We also have strong growth options across the portfolio, such as the South of Embley bauxite project in Queensland.
"All of these projects are available to be considered for investment when the time is right."
Mr Walsh's comments came after Rio revealed its March-quarter results yesterday, with weather-affected Pilbara iron ore production well short of analyst expectations. Production was still up 10 per cent over the March 2013 quarter, to 63.4mt.
Rio said it was sticking to its annual production guidance of 295mt from all of its iron ore operations, though some analysts suggested that was likely to prove conservative and Rio could hit the magic 300mt mark this year.
The company said expansion of its Pilbara export infrastructure to a 360mtpa capacity was on track to be completed in the first half of next year.
Rio shares closed up 9¢ yesterday to $63.35.
