4 Dec 2013

Rio to cut Capex

7:41 am on 4 December 2013

Rio Tinto is to reduce its capital expenditure by almost $US10 billion.

The company announced at an investor seminar in Sydney on Tuesday that it plans to reduce Capex from last year's peak of $US17.6 billion to $US8 billion by 2015.

AAP reports Rio also cut $US1.8 billion in operating cash costs in the 10 months to October as part of a target of $US5 billion.

When asked about job losses, chief executive Sam Walsh acknowledged they would occur, but not at existing low cost, long life, expandable assets.

"As long as you are in that position you are safe," he said. ''The workers in that position are iron ore, and to a lesser extent, copper workers.''

AAP reports the company has cut employee numbers by 3800 since mid-2012. However, there are 1800 new roles in an iron ore expansion project. Another 3000 roles have left the business through sales of assets.

Mr Walsh said Rio's aluminium, coal, diamonds and minerals businesses would find it tough to get capital allocated to them as Rio focused on paying down $US28 billion in gross debt.

The company announced the closure of the Gove alumina refinery in the Northern Territory last week.