Melbourne, Australia — MININGREVIEW.COM — 26 August 2010 – Anglo-Australian mining giant Rio Tinto aims to lift its exposure to Africa over the coming years, says CEO Tom Albanese.
Albanese also says the company – having recovered from its balance sheet woes of 2008 – has renewed efforts to scour the globe for additional mineral resources in an effort to meet increased demand for metals from China and other emerging economies.
Rio Tinto “’ which was heavily indebted when the global financial markets crashed in late 2008 “’ has aggressively tackled its balance sheet and restored itself to a much healthier position, with more than US$10billion (R75 billion) worth of asset sales, a rights issue and improved cash generation dragging debt levels down to well below US$19billion (R143 billion) from US$40 billion (R300 billion).
“Rio has very effectively strengthened its balance sheet to the point where growth is now back on the agenda, with the key project being the expansion of the Pilabra iron ore assets from 220 Mtpa to 330Mtpa,” a stockbroker says in a note.
Africa is one of the destinations on which Rio is focusing exploration attention, as it realises the strategic need to look outside its five key countries for future growth to meet demand from south-east Asia and India over the next decade or so. This will put a tremendous strain on commodity availability – given the voracious appetite of China.
Currently Africa makes up less than 5% of Rio’s business base.
“I’d say on balance we’re under-invested in Africa. If we can see the right combination of geology and business conditions I’d like to do more in Africa,” says Albanese.
“While the copper potential in the Democratic Republic of Congo is exciting, the country has a way to go before it will be attractive enough for a large company to make a sizeable investment,” he adds.
“We’ve geologists doing work in DRC. I love the copper potential there. Some of the grades in tailings dumps in the DRC are higher than our primary mines.”