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Amidst the uncertainty of the global market and the volatility in the prices of commodities it produces, mining giant Rio Tinto is to assure its investors today that it is still an investment of choice, boosting confidence back at the City as shares rallied minutes before the company holds its investors seminar in London and New York.
Shares of the world’s second largest mining firm moved up as much as 79.50 pence today, or 2.6%, to £30.64 in a show of confidence to Rio Tinto’s management, who has managed to rake in some US$500 million savings, in light of narrow possibilities in maximising profit during the current year, beset with falling commodity prices brought about by sluggish demand in developed economies.
“Our business remains resilient in this environment and our operations are performing better than our peers, reflecting our consistent strategy of running long-term, cost-competitive operations,” Rio Tinto’s Chief Executive, Tom Albanese said in a statement.
“Rio Tinto has the right strategy to maximise shareholder value in the long term. We are positioned to reap the benefits of long-term demand growth while withstanding short-term volatility. We have the flexibility to phase our investment projects and a disciplined and rigorous approach to capital allocation that ensures we only invest in the highest returning opportunities in the most attractive sectors and divest assets that no longer fit with our strategy,” was Mr. Albanese’s strong sentiment of the company’s fundamentals.
The firm has suffered a 22% fall on profit for the first six months of the 2012 financial year with US$5.8 billion compared to US$7.58 billion over the comparable period in 2011, as all of the natural resources it mines fell in prices, with the exclusion of gold.
The medals during the London Olympics were sponsored by Rio Tinto, providing about 4,700 medals of gold, silver, and bronze, one of three precious metals being mined by the firm across the globe. Rio Tinto also produces aluminum, diamonds, copper, and iron ore, and also ventures into energy by producing thermal coal, coking coal, and uranium.
Today’s investor seminar will give emphasis on the group’s copper interests as well as its technology and innovation division, which aids the company’s overall operations.
Mr. Albanese, along with Chief Financial Officer, Guy Elliott, Chief Executive of Copper Division, Andrew Harding, and Group Executive of Technology and Innovation, Preston Chiaro, will host the event.
