Rio Tinto Limited
From IntFX
See also: RIO for realtime information.
Rio Tinto, a leading international mining group, is well diversified both in terms of geography and products. The group is primarily engaged in exploration, development, mining and processing of various mineral resources such as iron ore, copper, aluminum, diamond, energy (coal and uranium) and industrial minerals (borax, titanium dioxide, salt, talc). The Companies assets include open pit and underground mines, mills, refineries and smelters and a number of research and service facilities. The Company operates across the world; however, it is strongly present in South America, Asia, Europe and southern Africa.
Rio Tinto has structured its business based on following product and global support groups:
- Iron Ore
- Energy
- Industrial Minerals
- Aluminium
- Copper
- Diamonds
- Exploration
- Operational and Technical Excellence (OTX)
The Group has primary listings on the London stock exchange and the Australian Securities Exchange. The group is headquartered in the UK and also has executive offices in Melbourne, Australia. The group employed approximately 35,000 in 2006 with 14,000 based in Australia and New Zealand and 10,000 in North America.
[edit] History
Rio Tinto Group was formed after unification of Rio Tinto plc (formerly The RTZ Corporation) and Rio Tinto Limited (formerly CRA Limited) in 1995 through a dual listed companies structure. Although the two entities exist as separate companies, they are governed by the same Board of Directors and management team. Shareholders of both the companies have equal right in the Rio Tinto Group.
The RTZ Corporation (formerly The Rio Tinto-Zinc Corporation) was formed in 1962 by the merger of The Rio Tinto Company and The Consolidated Zinc Corporation. CRA Limited (formerly Conzinc Riotinto of Australia Limited) was formed at the same time by a merger of the Australian interests of The Consolidated Zinc Corporation and The Rio Tinto Company.
[edit] Strategy
The Company focuses on maximizing shareholder’s value by investing in large, long life and cost competitive mining resources. Rio Tinto’s mining investments are driven by the quality of opportunity rather than the choice of commodities. It also focuses on maintaining certain diversification based on geography and has recently invested in Russia, Madagascar, Peru and Mongolia. The group also works toward improving productivity and performance across all primary business processes in order to increase the resilience of its portfolios in challenging market conditions.
[edit] Financial and operational performance
In 2006, the Company generated revenues of US$25.4 billion an increase of 22.6% over 2005 primarily owing to higher commodity prices. Rio Tinto’s profit margins have also shown continuous improvement over the years. The Company’s adjusted earnings before interest, tax and depreciation (EBITA) margin increased to 49.4% in 2006 from 47.0% in 2005 and 42.1% in 2004. Similarly, its net profit margin increased to 28.8% in 2006 from 23.9% in 2005 and 15.6% in 2004. As of September 25, 2007 Rio Tinto’s market capitalization was US$41.9 billion.
Iron Ore, Copper, Energy and Aluminum accounted for close to three-fourths of the Company’s revenues in 2006. Iron Ore, Copper (including the results from equity accounted units) and Aluminum contributed 88.2% to the total Company’s consolidated profit before finance items and taxes.
Rio Tinto production data for 2006 is given below:
| Alumina: | 3.2 million tons | grew 9.6% over 2005 |
| Refined aluminum: | 0.8 million tons | declined 1.1% over 2005 |
| Bauxite: | 16.1 million tons | grew 4.3% over 2005 |
| Borates: | 0.6 million tons | declined 1.3% over 2005 |
| Iron ore: | 132.8 million tons | grew 6.7% over 2005 |
| Coal: | 162.3 million tons | grew 5.7% over 2005 |
| Copper – mined: | 0.8 million tons | grew 2.4% over 2005 |
| Copper – refined: | 0.3 million tons | declined 4.9% over 2005 |
| Diamond: | 35.2 million carats | declined 1.3% over 2005 |
| Gold – mined: | 1.0 million ounces | declined 41.9% over 2005 |
| Gold – refined: | 0.5 million ounces | grew 25.2% over 2005 |
| Silver – mined: | 13.9 million ounces | declined 6.4% over 2005 |
| Silver – refined: | 4.2 million ounces | grew 17.4% over 2005 |
| Salt: | 5.4 million tons | declined 1.9% over 2005 |
