Rio Tinto's Incoming CEO Focused on Cash, Projects

   By Rhiannon Hoyle 
 

BRISBANE, Australia--Rio Tinto PLC's (RIO.LN) incoming chief executive said the miner, one of the world's largest, will be focused on developing its best new projects and generating as much cash as it can amid a continued downturn in global commodity markets.

"There is no doubt these are challenging times for the sector, and for your company," said deputy chief executive Jean-Sebastien Jacques, who will succeed CEO Sam Walsh in July. "The macro-economic environment is tough, and is likely to remain so for the foreseeable future, from whichever way you look at it."

Rio Tinto announced in March that Mr. Walsh will step down after three-and-a-half years in the role to be replaced by Mr. Jacques, the company's former copper chief.

"We will continue to maximize free cash flow and deliver a focused tier-one growth pipeline at the right pace," Mr. Jacques told Rio Tinto's Australian shareholder meeting.

"I am under no illusions - of the task, and the challenge ahead," he added. "It will not be an easy ride."

Chairman Jan du Plessis was cautious about the outlook for China, the world's top buyer of commodities such as iron ore.

"China's transition from a high growth, primarily investment-led economy to one of more moderate growth driven by consumer demand, continues and few signs emerged [last] year of an imminent turnaround in near-term growth," said Mr. du Plessis.

Soft readings on China's manufacturing industry have raised doubts about whether Beijing's recent efforts to boost the economy--including strong credit expansion and a front-loading of 2016 infrastructure budgets early this year--can prop up growth.

On Tuesday, Caixin Media Company Ltd. and research firm Markit Economics said the Caixin purchasing managers index was 49.4 in April, down from 49.7 in March and the 14th month below 50, signaling contraction. The official PMI, released by the government Sunday, weakened in April to 50.1 from 50.2 in March.

Write to Rhiannon Hoyle at [e-mail]

(END) Dow Jones Newswires

May 04, 2016 20:00 ET (00:00 GMT)

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