Profit slump for Rio Tinto

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Rio Tinto has recorded a 59 per cent slump in full-year net profit, which it has blamed primarily on the falling value of its aluminum business.

Yesterday Rio recorded net earnings of $US5.8 billion for calendar 2011, far below the $US13.32 billion it reported for 2010.

But it wasn’t all bad news, with underlying earnings rising 11 per cent to hit $15.5 billion.

According to PerthNow the figure beat the expectations of most analysts, who were betting on a $US15.3 billion report.

Following the announcement Rio Tinto’s CEO Tom Albanese and CFO Guy Elliot both declined their bonus.

Albanese was the chief driver behind the company’s $US38 billion investment in aluminum when it bought Alcan in 2007.

The company has since taken a $US8.9 billion write-down on the asset.

In a statement Rio said growth in its iron ore business was driving the company, with the majority of new project approvals coming from the Pilbara.

Earlier this week the company announced a massive $3.1 billion expansion to its Pilbara iron ore operations.

The investment will be used to take iron ore production in the region to 283 million tonnes by the end of 2013.

A second phase of the expansions will also be introduced to take production to 353mt by the first half of 2015.

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