MARKETS SPECTATOR: Ripping into Rio

Two Citigroup analysts have attacked Sam Walsh's expansion plans, saying cash must be returned to shareholders.

As far as research notes go, Citigroup analysts Clarke Wilkins and Heath Jansen are pulling no punches. In the wake of Rio Tinto chief executive Sam Walsh’s commitment at last week’s AGM to “deliver our iron ore expansion plans in the Pilbara,” Wilkins and Jansen are scathing in their assessment of Walsh’s plans.

“What is the purpose of mining companies?” the two Citi analysts rhetorically ask. “Is it to provide commodities to customers so that they are plentifully supplied at all times, or is it to create value for shareholders?”

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