Rio eyes cost reductions: report

Rio Tinto (RIO) chief executive officer Sam Walsh has directed the group's iron ore unit to cut the cost of operations in the Pilbara, The Australian reports.

According to the newspaper, analysts touring Rio's Pilbara operations this week were told the mining giant was eyeing a reduction in cash costs from $US47 a tonne in 2012, to possibly as low as $US35.50 in 2020, including capital to maintain the business.

The Australian reports Rio Tinto is also looking at significant capital expenditure reductions, with the miner aiming to spend only $US140 a tonne for every additional tonne of capacity as it pushes toward an annual production rate of 360 million tonnes, from 290 million tonnes (see Tim Treadgold's Re-examining Rio).

The previous capital intensity figure being targeted was in the mid $US150-a-tonne range.