Rio Tinto is a world leader in finding, mining and processing the earths mineral resources. The Groups worldwide operations supply essential minerals and metals that help to meet global needs and contribute to improvements in living standards. Rio Tinto encourages strong local identities and has a devolved management philosophy, entrusting responsibility with accountability to the workplace. Major products include aluminium, copper, diamonds, energy products (coal and uranium), gold, industrial minerals (borax, titanium dioxide, salt, talc and zircon), and iron ore. The Groups activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe and southern Africa. Rio Tinto comprises wholly owned subsidiaries (such as Borax, Comalco, Hamersley, Rio Tinto Coal Australia, Kennecott and Rio Tinto Iron & Titanium), partly owned subsidiaries (Coal & Allied and Palabora) and non-managed, (Escondida) and joint ventures (Grasberg) in which public shareholders, other companies or governments are partners.

            Red = 25 day moving average.           Green = 200 day moving average.

SALES PER ACTIVITY (Data as of 31/12/2005)

Iron:        29%
Coal:       19%
Copper     18%
Aluminum: 14.5%
Minerals:  12.5%
:              6%
Misc:        1%

Associated Press - 08.18.2006, 11:56 PM

Chile Copper Mine Talks to Resume


Workers and management at the world's largest privately owned copper mine agreed Friday to resume talks aimed at ending a 12-day strike.

The agreement was reached in a government-mediated meeting ordered by President Michelle Bachelet. It includes a promise by the workers "to maintain public order," said Julio Manque, who represents the labor ministry in the northern region where the Escondida mine is located.

Workers had blocked the entrance to the mine Thursday evening, triggering clashes with police and prompting the company to break off talks and suspend the mine's limited 40 percent production maintained with contract workers.

On Friday, company representative Pedro Correa said that activity at the mine will resume "but the process takes a while."

President of the workers' union, Luis Troncoso, said he expects an agreement can be reached by Tuesday.

Friday's decision came just hours after Bachelet ordered the labor ministry to offer the government's help to get both parties to talk again. Labor laws do not permit formal mediation by the government.

The Escondida mine, 1,000 miles north of Santiago, produces about 4 tons of copper a day, or 8 percent of world output. Company executives have estimated daily losses from the strike at $16 million.

The 2,052-member union's demand for an across-the-board wage increase was the main hurdle in the talks, Troncoso has said. The workers' original demand for a 13 percent increase was reduced Thursday to 10 percent, but the company has offered 3 percent.

The workers are also demanding a $26,900 end-of-conflict bonus, but the company has offered half that amount, plus low interest loans.

Talks for a new contract also included health and education benefits.

The Australian-British consortium BHP Billiton PLC owns 57.5 percent of the mine, while Rio Tinto PLC, also Australian-British, holds 30 percent, and the Mitsubishi Corp.-led Japanese consortium 10 percent.

If I have read the chart right, RSI looks very low so could be a good time to buy into this first class mining stock

Mining Weekly - 21 august 2006

BHP Chile copper mine workers reject new wage offer


Striking workers at the world's largest copper mine rejected a revised pay offer from BHP Billiton, extending a two-week strike in Chile that has cut production by as much as 60%.

The world's biggest mining company is offering more pay and higher bonuses, BHP Billiton spokeswoman Alejandra Wood said from Santiago. The 2 052 workers in the mine's main labor union decided the offer wasn't enough at a meeting late yesterday in Chile, union spokesman Francisco Aedo said.

Prices of copper, used in wires and pipes, have more than doubled in the past year as consumption soared in China, prompting unions to seek a greater share of mining companies' record profits. Mine management said August 16 the dispute was costing owners including BHP Billiton, Rio Tinto Group and Mitsubishi Corp. $16-million in profit a day.

The strike looks like it's going to go on longer than people expected, and in the short-term that's good for copper prices, said Ron Cameron, a resources analyst at Ord Minnett Ltd. in Sydney. They will have to reach a compromise at some stage.

Copper for delivery in October rose as much as 310 yuan, or 0,5%, to 66 7000 yuan ($8 370) a metric ton on the Shanghai Futures Exchange. It traded at 66 520 at 11:30 a.m. local time. It had fallen as much as 0,9% after BHP raised its pay offer.

Shares of BHP Billiton, which owns 57,5% of the mine, rose as much as 40 cents, or 1,4%, to A$28,50 on the Australian Stock Exchange. They traded at A$28,45 at 2:22 p.m. in Sydney. Shares in Rio Tinto, which owns 30%, fell 6 cents to A$75,19. Shares in Mitsubishi fell 0,8% to 2 425 yen in Tokyo.

The company has directed these talks poorly, said Pedro Marin, another union spokesman, in a phone interview from Antofagasta.

BHP Billiton raised its offer to a wage increase of 4 percentage points above inflation, 1 percentage point higher than previously offered, and a bonus of as much as 9,5% pesos ($17,834) for a 36-months contract. If workers sign a 48-months contract, BHP Billiton will raise pay by 1,3% in the fourth year, and pay a total bonus of 13-million pesos.

The Escondida's Workers Union No. 1, which represents 94% of the mine's employees, is seeking a wage increase of 10 percentage points above inflation and a bonus of 16-million pesos ($30,036) per worker for a 36 months contract. Chile's inflation rate was 3,8% in July.

The 4 percent offer wasn't large enough, Marin said. He added that the union was prepared to negotiate on its demand for a 10 percentage points above inflation. He also said the union isn't willing to agree to a four-year contract.

The workers could be in a precarious position if they reject this new offer, said Mark Pervan, head of research at Daiwa Securities SMBC in Melbourne. When you're dealing with a company that's this large and a tough negotiator, this is a good offer.

The strike had already cut capacity at the mine to between 40% and 60%, and led BHP Billiton on Aug. 8 to say it may stop delivery of copper concentrate, which is smelted in refineries to make the metal, to customers in Asia and Europe because of the strike.

The remaining share of the Escondida mine is held by the International Finance Corp. Escondida accounted for 8,5% of all mined copper worldwide last year.

Dow Jones Newswires - Tuesday, September 26, 2006

UBS Lowers Iron Ore Forecast


UBS cuts its iron ore forecasts and reduces earnings for BHP Billiton and Rio Tinto as result. Now expects 5% drop in iron ore prices in 2007, where previously forecasting 10% rise. Lowers Rio earnings forecast for CY07 by 6% and BHP by 3%. Cites growing iron ore production in China as well as slowing materials consumption.

SYDNEY, - Oct 18 - (Reuters)

Rio Tinto Q3 refined copper output down 15 pct


World number two miner Rio Tinto Ltd./Plc. on Wednesday posted a 15 percent fall in third quarter refined copper production after a smelter was shut down at the giant Kennecott mine in Utah.

Mined copper was also down in the quarter owing to a month-long strike at Rio Tinto's 30 percent-owned Escondida lode in Chile, it said.

Copper is seen as a key component underpinning forecasts for a sharp rise in the Australia and London-listed company's 2006 profits.

Rio, which sees strong demand for metals for the remainder of the year, is forecast to post a full-year net profit of around $7.6 billion, up by nearly half from 2005.

"Mined copper production was lower due to industrial action at Escondida and refined copper production was down due to the commencement of a scheduled smelter shutdown at Kennecott Utah Copper," the company said.

Close rival and 57.5 percent partner in Escondida, BHP Billiton Ltd./Plc is also expected to show a drop in copper output due to the strike when it reports its quarterly production on Oct. 24.

London Metal Exchange-traded copper sold for around between $7,150 and $8,100 a tonne in the third quarter. In May it fetched as much as $8,800 a tonne, double its January price.

Third quarter refined copper output of 75,600 tonnes was down from 89,200 tonnes in the same period a year ago.

Mined copper production fell to 182,800 tonnes from 195,400 tonnes over the period.

Rio's share of third-quarter mined copper from Escondida dropped to 81,100 tonnes from 101,700 tonnes a year earlier.

Rio Tinto also reported a 1 percent fall in aluminium output to 215,200 tonnes over the third quarter versus the same period a year ago.

Iron ore production over the period rose 11 percent to 35.74 million tonnes, it said.

Rio Tinto's stock, which has largely tracked metals prices this year was down 1.8 percent to A$74.18 in late trading versus modest gains in the wider S&P/ASX200 index. The stock started the year at A$69 a share. ($1=A$1.33)

Rio Tinto PLC
27 October 2006

Rio Tinto increases capital management programme to US$7 billion


Rio Tinto has announced today that it will increase its capital management
programme to US$7 billion. This is US$3 billion more than the previously
announced capital management programme for 2006 and 2007 of US$4 billion. The
additional cash return will be made through the buyback of shares between now
and the end of 2007.

Rio Tinto's finance director Guy Elliott said, "In today's favourable markets,
the Group's high quality assets are generating record cash flows. This allows us
to make substantial investments in the growth of the business and to return cash
to shareholders. Our balance sheet remains strong, and we are pleased to make
this increase in our capital management programme. Of course the programme
remains subject to market conditions."

Under the current US$4 billion capital management programme, US$1.5 billion was
returned to shareholders on 6 April 2006 in the form of a special dividend. Of
the remaining US$2.5 billion of that programme, US$1.9 billion has been returned
to shareholders through the buyback of Rio Tinto plc shares in the London
market, leaving an outstanding balance of US$600 million to be completed.

43 to 53 in the blink of an eye! Some people will have made some big money today! (Due to the rejection of a bid from BHP Billiton).

Over 57 at one point, very nice indeed. Taken some profits, these deals have a habit of not coming to fruition.

Expensive share, but good to see someone benefitted from the surge. Had BLT myself, so took profit on that before it went down.
Would now expect RIO to drift off a bit, although BLT still hoping to do a deal. It looks like RIO might be interested, but at the right price.

It's been talked of for so long that it probably will happen at the right price. POG is a good 'un too which was pulled up on the back of rio today.

i admit to a vested interest (like Onslow!), but i would be surprised if a proper bid does not materialise.
meanwhile, please see the chart below and make up your own mind as to when or if it is worth buying on fundamentals alone

Evening cynic,made a small profit last week on these and glad i got out as this week i would made a loss.I am going back in next week as i think there will be (1)a new bid from blt or (2) a new bid from a different company.
Over a £6 drop this week.I think i will wait for this weekends papers as there is always something about rio.

6 is not a big deal in %age, but I think BLT may have another go.
Interesting to see XTA is fishing around also. Not in the same league as BLT or RIO, but it looks like the sector is starting to consolidate. May well be worth holding a stake in a few of the big companies just on M & A rumour alone.

seems that Goldman put out a general warning about commodity prices yesterday which sparked the selling ..... however, they also reiterated that consoilidation in the sector was effectively a racing certainty

Takeover Panel has told BHP to put up an offer this week or to bugger off ...... interesting and possibly quite scary times ahead, at least in the very short term ..... big Q is whether another bidder will put his head over the parapet if BHP walks out

Not sure there is anyone else who can raise the dosh. Plus I don't think BLT would be very happy to see someone else become a joint partner in the world's biggest mining company. To be fair to BLT, they have made a couple of offers now, which have been rejected by RIO, but in theory they could continue to make offers well in to 2008. The main sticking point seems to be valuation of RIO, as BLT don't seem to have any problem raising the cash. Tricky one to call, imo.

the chinese might well be very interested .... but that is pure hypothesis .... we shall just have to wait and see

From AFX today/yesterday:

BHP Billiton/Rio Tinto merger threatened by Takeover Panel deadline - reportAFX
LONDON (Thomson Financial) - BHP Billiton PLC's proposed 162 bln stg merger with rival mining group Rio Tinto PLC is in danger of being derailed this week as the Takeover Panel looks set to impose a deadline on a formal offer from the world's largest miner, said The Mail on Sunday. The intervention of the Panel comes at the request of Rio's management, which has lost patience with BHP Billiton after it failed to come up with a concrete takeover bid after weeks of informal overtures.

Rio chief executive Tom Albanese has already said that a tentative all share merger proposal from BHP 'seriously undervalues' his company's growth prospects.A 'put up or shut up' ultimatum from the Takeover Panel would mean BHP either walking away from what would be one of the largest takeovers ever seen or mounting a hostile assault, which would be much more complicated and would therefore stand less chance of success. A hostile approach, which BHP has been at great pains to avoid, would mean the company could not structure the deal as a simple scheme of arrangement as this would require a recommendation from Rio's board. Instead of simply merging the shares of both companies' shareholders, BHP would have to make a formal offer to Rio's shareholders in Britain and Australia as Rio is in both countries.

RIO is on the rampage today - currently +103 - though i fear it is no more exciting than some bears taking their profits as volume is pretty unexciting ..... unless there still some large hidden/incomplete orders still to be recorded

following worth reading, especially in conjunction with BRR thread .....

Lehman Brothers raised its 2008 earnings estimate for Rio Tinto by 3 pct, or 641 mln usd, following the company's plan to sell as much as 15 mln tonnes of iron ore in the spot market next year.

Rio Tinto said yesterday it plans to take advantage of the 'huge' gap between spot prices and the lower prices received under long-term contracts.

The world's third-largest mining company normally sells most of its iron ore production under long-term contracts, although it sold about 1 mln tonnes of iron ore this month on the spot market for about 190 usd a tonne. The broker estimates the delivered cost of similar quality ore from Australia, assuming a contract ore price and spot freight rate, is 86 usd a tonne.

Annual price negotiations between major suppliers, including BHP Billiton, Rio Tinto and Brazil's Vale, are under way. Lehman Brothers expects a 50 pct increase in iron ore prices, above the consensus of 35 pct, although it noted that even this figure may be conservative.

'We expect Rio Tinto to be more aggressive than usual in iron ore contract price negotiations for 2008 as a higher-than-expected iron ore price increase is likely to increase the standalone value of Rio Tinto and increase the price that BHP Billiton would have to pay to acquire Rio,' it said in a research note.

Rio Tinto has announced a number of major investments in projects and stressed its organic growth potential since receiving an unsolicited takeover approach from BHP Billiton last month.

Lehman expects Rio Tinto to post 2008 EBITDA of 21.09 bln usd after the broker factored in the spot market iron ore sales for next year. Lehman's forecasts does not factor in any possible spot market sales after 2008.

'We recommend that investors buy shares of Rio Tinto at current levels as we expect iron ore contract prices to significantly exceed the market's expectations,' it said in a research note.

The 15 mln tonnes Rio Tinto hopes to sell is equivalent to about 10 pct of its iron ore production.