1. Rio Tinto's growth program is well underway with work progressing on $ 27 billion of major capital projects, and a $35 billion pipeline of high quality, unapproved projects currently in the advanced-study phase.
2. Growth projects are well balanced between Brownfield expansion of existing assets such as iron ore in the Pilbara and newer, world class quality projects including coal in Mozambique and copper gold in Mongolia.
3. Rio Tinto's order books are full and commodity prices remain robust. However, customer sentiment is now more cautious and physical markets are softer than they were six months ago, reflecting concerns over the health of the OECD economies and persistent volatility in financial markets.
4. Rio Tinto's estimated net debt as at August 31st was $ 7.6 billion, a reduction of $ 1 billion since June 30. This has been achieved despite the accelerated share buyback program and continued investment in growth.
5. More than $ 4 billion of Rio Tinto's $ 7 billion share buy back program has now been completed.
Mr Tom Albanese CEO of Rio Tinto said that "We've been saying for quite some time that we expected to see patterns of increased price volatility amidst turbulent financial markets and that scenario is playing out. Our order books are full and pricing is strong, but it is noticeable that markets are somewhat weaker than they were six months ago. We are realistic and well positioned for any number of scenarios our high quality growth program is in full swing to capture the expected increases in longer-term demand, and our balance sheet is very strong and well able to withstand any near term decline. Our long term view of demand growth is unchanged. As the metal hungry developing economies grow, demand for copper, aluminium and iron ore will double over 15 to 20 years. But challenges on the supply side are limiting the speed of new supply to market. Project finance is tight because of the current market jitters. Permitting delays, labour and equipment shortages, and technically challenging ore bodies are all contributing factors. With Rio Tinto's exceptional growth projects in a range of countries and commodities, coupled with our leadership in new technologies, we are in an advantageous position."
Mr Guy Elliott CFO of Rio Tinto said that "Our balance sheet is robust, monthly cash flow generation remains high and we are able to access debt markets at competitive rates, as we demonstrated just last week with an attractively-priced bond issue. Our prudent balance sheet and single A credit rating are highly beneficial, particularly in challenging markets. This approach means we have been able to pursue our strategy of targeted acquisitions and shareholder returns without interruption, successfully completing the Riversdale acquisition in August."
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