Rio Tinto tipped to stick to no-output cut mantra on iron ore

miércoles 6 de mayo de 2015 03:26 GYT

By Manolo Serapio Jr and Sonali Paul

SINGAPORE/MELBOURNE May 6 (Reuters) - Rio Tinto, the most profitable iron ore producer, is in a strong position to keep its mines running at full tilt, even as rivals BHP Billiton and Brazil's Vale apply the brakes in a market suffering a supply glut.

Despite a plunge in ore prices, Rio Tinto is not expected to face pressure from shareholders at its annual general meeting in Perth on Thursday to alter expansion plans.

The world's second-biggest iron ore producer said in February in would return $2 billion to shareholders via a buyback and its stock has outperformed its rivals.

Rio's shares are down less than 4 percent in the last 12 months, compared with BHP's 14 percent drop and Vale's 20 percent decline.

The top three iron ore miners had up until recently resisted calls to curb output, vowing to lift production to gain more share of top market China and force out higher cost miners.

Rio plans to ship around 350 million tonnes in calendar 2015, up from 300 million tonnes last year.

The firm's long-term plan is to reach a production capacity of 360 million tonnes per year.

But Vale, which is grappling with high debt, and BHP appeared to blink in recent weeks by flagging they would curb iron ore expansion plans or trim production.   Continuación...