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Output proves Rio Tinto’s philosophy of flying solo

Rio Tinto yesterday reported a record annual output for key commodities in its fourth quarter and full 2007 year, supporting its argument that it shouldn’t be taken over.

The group, which is the takeover target of larger rival BHP Billiton, has so far warded off advances by arguing that its prospects put it in a strong position to supply a “metal- hungry” world.

Tom Albanese, chief executive of Rio Tinto, said the group had “pulled out all the stops’’ to boost production in 2007.

“Investment to expand capacity in recent years is paying off with record volume growth in many commodities. We are driving the business at a record pace.”

Releasing its fourth quarter and annual operations review for 2007, Rio Tinto said it had set annual production records for iron ore, alumina, aluminium, refined gold and refined copper — five of 10 principal commodities produced by the group.

Aluminium output showed the largest single increase, with the benefits of the Alcan acquisition now reflecting in the figures.

Aluminium production was a massive 75percent up at 1.5-million tons in 2007 while alumina output grew 19percent to 3.9-million tons during the year.

Refined copper production was 30percent higher at 390000 tons and Rio Tinto’s share of mined gold production at 1.2-million ounces reflects a 23percent increase over 2006. Iron ore production set a new annual record at 179-million tons in 2007. On an attributable basis, 2007 iron ore production was 145-million tons, a 9percent increase on 2006’s total. Rio Tinto announced plans in December to invest at least $1.1-billion (R7.6-billion) in mine expansions as it sought to prove the merits of its growth plan. The group also reported a step up in exploration and evaluation expenditure with gross pre-tax cash costs in the 12 months of 2007 doubling to $570-million.

“With significant expansion in iron ore and aluminium and the contribution of the Alcan acquisition we are set to see an acceleration of this growth in 2008,” Albanese said.

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