Rio Tinto plans to cut billions in costs amid volatile conditions

Global miner Rio Tinto said on Thursday it aims to save its operating and support costs by more than 5 billion U.S. dollars by the end of 2014 to respond to market volatility. Rio Tinto's planned spending on exploration and evaluation projects will be reduced by 1 billion U.S. dollars over the remainder of 2012 and 2013, it said. The company's capital expenditure on approved and sustaining projects will taper off from their current levels in 2013. "We are taking further tough action to roll back the unsustainable cost increases of the past few years and are maintaining a relentless focus on improving productivity," Rio Tinto Chief Executive Tom Albanese said in a statement. "We have the ability to respond to changing market conditions and I am confident we have the right strategy to maximize shareholder value in the long term." Rio Tinto believes the short-term macroeconomic outlook remains volatile, with major uncertainties about future economic growth in the United States and Europe. "Rio Tinto is guardedly optimistic on China's prospects," the mining giant said in the statement. "A number of recent macro leading indicators have beaten market expectations, suggesting early signs of economic pickup." Rio Tinto said it expected this to continue in 2013, leading to a slight rise in Chinese GDP growth to above eight percent.