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$RIO Lays Out a Plan to Boost Production While Cutting $5 Billion in Capex

Rio Tinto Group, the world’s second- largest mining company, said it’s targeting savings of $5 billion by the end of 2014, while simultaneously boosting production at its iron ore, copper and alumina units.

“We are taking further tough action to roll back the unsustainable cost increases of the past few years,” Tom Albanese, chief executive officer of the London-based company, said today in a statement. “Our two most challenged businesses are aluminum and coal, and in particular Australian coal,” he later told reporters in Sydney.

Rio Tinto plans to cut the $5 billion in operating and support costs compared with expected costs this year, joining mining companies including BHP Billiton Ltd. (BHP) in seeking cost savings as well as curbing investment on new projects as metal demand wanes. Rio last month said it’s delaying investment decisions in commodities such as coal while continuing spending on its Australian iron ore expansion.”

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