The group is one of the world’s largest mining companies, with a pre-tax profit of approximately 10.2 billion US dollars in 2007 on consolidated turnover of 25.4 billion USD. Since 1995, Rio Tinto has been a dual listed company. Rio Tinto Limited, formerly known as CRA, is listed on the Australian Securities Exchange, with Rio Tinto plc (formerly RTZ) listed on the London Stock Exchange as well as New York Stock Exchange (under ticker RTP).
The two companies are managed as a single economic unit by a unified board, with a share in either company entitling the owner to the same voting rights and dividend payouts. RTZ shareholders made up 76.7% of the new unified entity, which is primarily managed from London. Rio Tinto is thought to be the first company listed on the ASX to have reached a share price of over $100. This is not true, the most famous case being the Poseidon bubble in 1969-70 when the discovery of nickel ore resulted in the Poseidon share price climbing from 80 cents to $280 before collapsing. Recently it has agreed to buy Canadian aluminium company Alcan Inc. for $38.1 billion, in a move that creates the world’s biggest aluminium company. Rio will pay $101 per common share. Rio’s bid had been unanimously recommended by Alcan’s board, but remains subject to shareholder and regulator approval. Alcan’s Chief Executive Dick Evans would lead the new division which would be renamed Rio Tinto Alcan and its headquarters situated in Montreal.
On November 8, 2007, rival mining company BHP Billiton announced it was seeking to purchase Rio Tinto Group in an all share deal. This offer was rejected by the board of Rio Tinto as it “significantly undervalues” the company. It is unknown if BHP Billiton will attempt to purchase Rio Tinto through some form of hostile takeover. This made Rio Tinto’s share price soar to over $130. The group produces a number of mineral commodities in its various divisions:
Iron ore
Rio Tinto wholly owns Hamersley Iron, which owns and operates a number of mines in Western Australia either wholly or jointly with several partners. Its partners on some projects notably include several Chinese corporations.
Rio Tinto also owns 53% of Robe River Iron Associates and 59% of the Iron Ore Companyof Canada. Iron made up 18% of revenue in 2003 and was responsible for 36% of the group’s profit. It is the world’s second-largest producer of iron ore. Future iron ore mines are being developed at Simandou in Guinea. Copper The copper division not only produces copper itself, but also a considerable quantity of gold from its mines in Australia, Indonesia, South Africa, Chile, and the United States, some as part of joint ventures. The group owns Kennecott Utah Copper Corporation. The copper group was responsible for 23% of turnover (of which 55% was copper and most of the remainder gold) and 32% of profits in 2003. Energy The company’s energy group includes coal mining operations in Australia (Rio Tinto Coal Australia) and North America, and Energy Resources of Australia, which operates the Ranger Uranium Mine near Kakadu National Park in Australia. The energy group also operates the Rossing uranium mine in Namibia. This group contributed 20% of turnover and 11% of profit. Industrial minerals The Industrial minerals group extracts talc, titanium dioxide, salt, borax, amongst several others. These operations are scattered across Australia, the United States, and Africa. This group contributed 15% of turnover and 11% of earnings.
Aluminium
Rio Tinto owns Comalco, which mines bauxite (aluminium ore) in Weipa, Queensland, operates alumina refineries in Gladstone, Queensland. It also operates two aluminium smelters in Australia at Bell Bay (Tasmania) and Boyne Island (Queensland, 59% interest), and one in New Zealand at Tiwai Point (79% interest). The group also operates the Anglesey Aluminium smelter at Holyhead in the United Kingdom. This group contributed 16% of turnover and 14% of adjusted earnings.
Diamonds
The company’s diamond operations are best known for the pink diamonds produced at the Argyle diamond mine in Western Australia, which produces over 90% of the world’s supply of these gems and around 30% of the world’s annual production of all natural diamonds. The company also owns 60% of and manages the Diavik Diamond Mine in Canada’s Northwest Territories, and the Murowa diamond mine in Zimbabwe.
Other commodities Rio Tinto owns the Borax Company that produces borax and is famous for the “20 Mule Team” trademark which it shares with the Dial Corporation. Rio Tinto also produces bauxite, gold, titanium, lead, zinc, cobalt, nickel and uranium.
Technology The company also has a technology group conducting research and development, notably including the HIsmelt iron smelting process, and an exploration group.