Rio to increase spending

Chief executive Tom Albanese believes Rio Tinto has successfully weathered significant financial difficulties and is now well positioned to pursue major future growth projects.

Rio Tinto has successfully weathered significant financial difficulties and is now well positioned to pursue major future growth projects, chief executive Tom Albanese said at the company’s annual investor seminar in London over the weekend.

Albanese pointed to moves such as shedding debt through sales of its Alcan assets and a $15 billion rights issue as actions that have placed Rio in a positive financial position.

“We have emerged from the past year a leaner, more flexible business with our options for growth intact,” he said at the seminar.

“We are now well-positioned for disciplined growth and will balance this with the need to further pay down debt.”

According to Albanese, Rio’s capital expenditure for 2010 will be at least $5 billion, with the possibility of that number rising to $6 billion. Of that increased capital expenditure, up to $3.5 billion will be set aside for growth projects.

“We will continue our programme of cost reduction and debt repayments but our renewed strength enables us to focus on disciplined capital expenditure on premier growth options,” Albanese said.

“This will position us well for the expected recovery in demand growth over the longer term.”

Albanese will speak to local investors at the Australian investor seminar in Sydney this morning.

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