Rio Tinto's Net Profit Falls by 40 Percent

Anglo-Australian mining conglomerate Rio Tinto saw a 40 percent fall in its 2002 net profits to $651 million from $1.08 billion a year ago. Excluding exceptional charges, the adjusted result was down 8 percent to $1.53 billion from $1.66 billion a year ago yet, remained the second highest in the company's history.

Sir Robert Wilson, Chairman said the adjusted profit result was a creditable performance in difficult market conditions. The company did enjoy a record cash flow from operations of $3,743 million, ten percent above 2001.

Diamond production from Rio Tinto's Argyle mine in Western Australia had a gross turnover of $372 million in 2002, an increase from $278 million in 2001. Net earnings from Argyle increased to $65 million in 2002 from $58 million in 2001 as diamond production from the mine increased by 29 percent to 33.6 million carats in 2002.

Diavik, Canada's second mine in which Rio Tinto holds a 60 percent stake, delivered its first production. Leigh Clifford, Rio Tinto's chief executive said, "Diavik is up and running, ahead of schedule, and will complement existing diamond production from Argyle." The project is expected to cost $850 million following completion and at its peak the mine is expected to produce about 7 million carats annually.

Rio Tinto has several diamond exploration projects on the go. In Africa drilling has started in the south of Botswana and at the Aredor project in Guinea. In India exploration continues in Andhra Pradesh and in Canada in Ontario, Nunavut and on Brodeur Peninsula.