Rio reassures on Pilbara plans

Miner pressured to cancel expansion, return cash to shareholders.

The head of Rio Tinto's (RIO) iron ore division, Andrew Harding, has sought to reassure investors that he will not lead the miner through its large-scale Pilbara expansion plans unless there is a sound business case for doing so, as he seeks to deflect shareholder pressure to return excess cash to investors instead of embark on the planned expansion, according to The Australian Financial Review.

If it follows through on the expansion, Rio would become the world's largest iron ore producer. But Rio and other large miners have faced pressure to revisit expansion plans until the outlook for Chinese commodity demand becomes more clear.

But Mr Harding said that achieving such distinctions will not drive the decision, unless the expansion makes sound investment sense.

“If I am required to build the business to a certain size because it maximises value, I will do that if it's sensible and if there's another way that maximises and increases value I will do that, but I am not in love with any of it.” Mr Harding said, according to the AFR.

“You have to maintain an ego that does not need to be satisfied in building things.

“I'm a mining engineer, I am not a romantic truck lover or process plant person or anything like that.”  

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles