Rio Tinto Talking Down 2009 (RTP)
The slumping global economy has cut demand for steel, and lower demand for steel has cut demand for iron ore. The CEO of Rio Tinto plc (NYSE:RTP) put some numbers on that today. Rio’s iron ore production for the first…
Production of bauxite was down 19%, alumina down 2%, and aluminum down 6% year-over-year, but flat sequentially. Rio also closed a Canadian aluminum smelter in January, further reducing production. All told, the company is planning an 11% reduction in aluminum production in 2009.
The company is still counting on the investment from China’s aluminum giant, Chinalco, to pull its chestnuts out of the fire. The $19.5 billion investment is under scrutiny by Australian regulators.
Rio also noted that it had sold $2.5 billion worth of assets and experienced “no significant movement in net debt” during the quarter. That’s good news, since the $38 billion in debt from Rio’s purchase of Alcan is probably quite enough.
Rio’s shares are off about 2% in early trading, at $142.90. The 52-week range is $59.20-$558.65.
Paul Ausick
April 15, 2009
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