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Rio Tinto restructure to protect profits amid tight iron ore market

ABC reported that resource giant Rio Tinto will merge its copper and coal business as part of a new range of cost cutting measures.

Under the new arrangements, the miner's portfolio of assets will be condensed into four divisions aluminium, copper and coal, diamonds and minerals and iron ore. Uranium will be added to the diamonds and minerals business.
The restructure comes amid tumultuous market conditions with commodity prices under increasing pressure. The price of iron ore, Rio's biggest income earner in Australia, had more than halved over the past 12 months to a little over USD 60 per tonne.
Mr Sam Walsh CEO of Rio Tinto said that the restructure would help the miner further reduce costs and simplify the company's business structure. These changes are part of our continuing business transformation to reduce costs, simplify and strengthen our company and deliver sustainable value for shareholders. Our coal and uranium assets remain a part of our world-class portfolio. We will work hard to ensure there is a smooth transition for our colleagues in the Energy product group and continue to maximise efficiencies in our coal and uranium operations."

Source : ABC

Mar 4, 2015 10:18
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