But what exactly? The AFR and BS are reporting it’s all about productivity:
Rio said it had boosted the size of the expansion plans to 360 million tonnes from 353 million tonnes previously through de-bottlenecking and productivity improvements with minimal spend.
It has a current production capacity of 237 million tonnes and expects to reach 360 million tonnes by 2015.
Rio said it was targeting a cumulative $US5 billion in cost reductions throughout the business by the end of 2014 from 2012 levels. It will reduce spending on sustaining capital by $US1 billion next year.
Rio also revealed it cost the miner $US24.50 per tonne to produce iron ore in the first half, or $US47 a tonneelivered to China including royalties and other costs.
And prospecting:
The group will also cut spending on exploration and evaluation projects by $US1 billion ($A961.95 million) over the remainder of 2012 and 2013.
But there is also this:
Capital expenditure on approved projects will taper off from their current levels in 2013.
And this:
Rio Tinto’s major Pilbara iron ore expansion plan remains on budget despite the high Australian dollar and other cost pressures after the miner took measures, including a reconfiguration of its mine plans.
Any input from readers is welcome. It’s the pullback on expansion plans you’re having when you’re not pulling back plans…