Rio Tinto has increased its thermal coal reserves in the Hunter Valley.
The miner is ore reserves increased by 546 million tonnes, from 1331 Mt to 1877 Mt.
Rio Tinto’s coal boss Chris Salisbury said the company’s coal assets in the Hunter Valley are “world class and offer a large, contiguous footprint within the most attractive sections of the coal district”.
“An extensive drilling program over many decades means we have high confidence in our increased understanding of our coal assets and their quality, which is characterised by shallow, thick seams with little geological faulting,” Salisbury said.
“This discovery of greater coal reserves and resources is the result of more than a year’s work and forms part of our wider efforts to deliver greater value to our shareholders.”
Rio also revealed details around its iron ore business in the Pilbara.
The company has deferred an investment decision on the proposed billion-dollar greenfield Silvergrass mine until at least 2015.
However the miner said it is still on track to ramp up iron ore production to 330 million tonnes in 2015 and 350 million tonnes in 2017.
The company said it will hit these targets by focusing on brownfields, debottlenecking and productivity across its Pilbara mine network.
Rio described its iron ore operations as “one of the most attractive business in the world”.
“Not just in the mining sector, but across all industries.”
It said its ramp up plans would create the best value for Rio shareholders.
“For almost 50 years, the Pilbara assets have produced an average EBITDA margin of 50 per cent and the 360 project positions the business for industry-leading returns over the long term. Shareholders stand to benefit from the very considerable value this will generate.”
“The delivery of our progressive dividend is a key commitment. Looking out over the next five years, we expect to generate strong free cash flow and we remain committed to materially increase cash returns to shareholders in a sustainable way,” Rio Chief Sam Walsh said.
“I look forward to announcing this at our annual results in February next year.”
Rio said it is transforming into a more streamlined, accountable business and moved to assure to its capital expenditure would fall below $8.5 billion for 2014, down 34 per cent year-on-year.
It also reiterated its plan to cut cash costs by $5.4 billion by 2015.