Rio Tinto sees 2016 capex cut by USD1bn

8th Dec 2015 07:08

(ShareCast News) - Rio Tinto said 2016 group capital expenditure will be $1bn (£660m) less than forecast at $5bn (£3.3bn) as its cost cutting regime continues.Capex for the 2015 year will be $500m lower at $5bn, Rio said in a statement.The mining and metals giant said its aluminium products unit would deliver around $300m of cash cost improvements, a cut of $45m in sustaining capex and cut working capital by around $400m from 2014 levels.Rio said cash "remains a key focus", and the momentum in operating cost reductions should remove around $300m in additional cash costs from the aluminium product group in 2016, excluding any impact from currency or oil."Further improvements will also be made in productivity in 2016, with anticipated increases in output from bauxite (up 4% to 45m tonnes), alumina (up 3% to 8m tonnes) and aluminium (up 10% to 3.6m tonnes)," Rio said.Rio Tinto said it has an "unrivalled portfolio of high-margin, tier one bauxite assets that are well positioned to capitalise on the growing seaborne market"."The recently announced Amrun project in Australia is one of the highest quality mining projects in the world and will be crucial in meeting future demand from China," it said.Rio two weeks ago said it was spending $1.9bn expanding its bauxite business in Queensland adding that this would produce rates of return in excess of 20%