Soren Moller: Rio Sees Signs of Renewed Spending Appetite to Balance Returns

Soren Moller Finance's Analyst Peter Bond Reports that Rio Tinto Group, the world's second-biggest miner, sees renewed investor appetite for spending as it seeks to balance shareholder returns with capitalizing on growth opportunities from Australia to Peru.

Soren Moller Finance’s Analyst Peter Bond Reports that Rio Tinto Group, the world’s second-biggest miner, sees renewed investor appetite for spending as it seeks to balance shareholder returns with capitalizing on growth opportunities from Australia to Peru.

“A year ago the market was talking about returns, returns, returns and stop investing,” Mr. Bond said in a report in Luxembourg today. “Now people are taking a long-term view and recognizing the fact there has to be a balance.”

“Rio said in December it would reduce project spending to $11 billion this year and to about $8 billion in 2015, less than half its outlay in 2012. Capital expenditure will be in a range of $8 billion to $10 billion going forward.” Bond said.

Investors including BlackRock Inc. which manages the $7.6 billion World Mining Fund, are among those calling on companies to consider options for future growth. This year holders have begun seeking a more balanced approached, Bond said.

Rio will give options to its board for investments in copper and bauxite projects from next year, Bond said in May. Favored prospects include the La Granja copper project in northern Peru and South of Embley bauxite project in Queensland state, he said. London-based Rio also sees more growth potential in iron ore, Bond said last week at Soren Moller.

Copper and other industrial metals are among commodities poised for gains as China’s economy rallies on policy-easing measures and stronger export markets, Soren Moller said in a July 8 report. Copper demand may rise as China increases power infrastructure investment from this half, it said.

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Soren Moller is an independent financial advisory firm based in Luxembourg and has been established since 2002. We aim to provide advice to both individuals and companies on all aspects of financial planning, through a long term approach of fully und