Overview
- Industry areas
- Market share / importance
- History and strategy
Overall employees = 102,000 Annual production (2008):
Bauxite – 34,998,000 tonnes3
Iron ore – 153,394,000 tonnes4
Diamonds – 20,016,000 carats5
Gold (mined) – 501,000 ounces6 For comparison: BHP Billiton
Market capitalisation - US$142.9 billion
Employees = 41,0007
Annual production (2008):
Iron ore - 112,260,000 tonnes
Diamonds – 3,349,000 carats
Gold – 161,500 ounces8 Vale
Market capitalisation = US$93.36 billion
2008 production (is this equivalent to annual production):
Bauxite – 11,628,000 tonnes9
Iron ore – 301,696,000 tonnes10
Gold – 85,000 ounces11 History The Rio Tinto Group comprises Rio Tinto plc (UK) and Rio Tinto Limited (Australia) which were founded in 1873 and 1905 respectively. The original Rio Tinto company was set up by a group of investors including Matheson & Co. and Deutsche Bank, who together bought the Rio Tinto mine, in Huelva, Spain, from the the Spanish government for $3.7 million in 1873.12 By the end of the 1880's Rio Tinto was the world's leading copper producer.13 Thus in its early years RTC returned huge profits to its investors - introducing new technologies and collaborating with competitors to fix prices.14 The company repeatedly refused to raise wages, despite increased revenues, instead offering workers services such as company accommodation, shops and schools15. However by the 1920's labour struggles and political difficulties emerging from nationalist attempts to reclaim profits from the mines created difficulties for Rio Tinto. During the Spanish civil war Rio Tinto infamously applauded Franco's forces for assassinating strikers and a group of radical miners who occupied their mines. Turmoil caused by this war and then the second world war led to production difficulties and Rio Tinto saw a decline in profits, around this time the copper reserves also began drying up.1617 Growing difficulties at the Spanish operation led Rio Tinto to expand its business elsewhere. Its first major acquisition was of a significant portion of the rhodesian copper belt in 193018. Through merging RTC's assets with those of Anglo-American, the Rhokana corporation was formed which swiftly became a leading copper producer worldwide.19 Then in 1955 RTC began its first foray into uranium mining – acquiring a majority share in the Algom mines in Lake Elliot, Canada. By the end of the 1950's Rio Tinto Algom was producing around 15% of the world's uranium oxide.20 In 1962 the Rio Tinto company merged with the Consolidated Zinc corporation to form RTZ (initially Rio Tinto-Zinc corporation) and its Australian subsidiary CRA (initially Conzinc Riotinto of Australia limited). This allowed Rio Tinto to expand its operations significantly and a boom period followed the merger. Between 1962 and 1968 the two groups discovered and began operating numerous mines worldwide including the Rossing Uranium mine and Bougainville Copper as well as acquiring several smaller companies.2122 Due to their success, from 1968 to 1987 RTZ and CRA expanded their operations beyond mining, buying up shares in many different industries such chemicals, oil and gas. However in 1988 the company decided return its focus to core mining activities and proceeded to sell off all non-core assets.23 In 1989 Rio Tinto purchased all of BP's mineral operations, spread over 15 countries in a US$4.3 billion deal that made RTZ one of the largest mining groups in the world.24 In the same year RTZ's pacific subsidiary Bougainville Copper was forced to cease operations due to militant attacks on its mine by indigenous islanders.25 In 1995 RTZ merged with its Australian subsidiary CRA to form Rio Tinto - a dual listed company and then in 1997 RTZ and CRA were renamed Rio Tinto Plc and Rio Tinto Limited, collectively known as the Rio Tinto Group.26 In 2007 Rio Tinto acquired the Canadian aluminium producer Alcan Inc. in a US$38 billion deal that made Rio Tinto the world's leading aluminium producer.27 Due to mounting debts in recent years Rio Tinto has been forced to seek capital investments and in the same year sold a 12% shareholding to a joint venture of China's national aluminium company Chinalco and American company Alcoa.28 Relations with Chinalco have since tightened with the signing in March 2010 of a US$1.3 billion deal for Chinalco to acquire a 47% stake in the Simandou Iron ore mine in Guinea.29 Despite the increasing interest of Chinese business in Rio Tinto, on 5th July 2009 four Rio Tinto employees were detained in Shanghai on alleged corruption charges and all found guilty in March 2010, with sentences varying from 7 to 14 years.30
References
[1] http://money.cnn.com/magazines/fortune/global500/2009/full_list/101_200.html
[2] www.riotinto.com/annualreport2009/performance/index.html
[3] www.riotinto.com/whatweproduce/452_aluminium_4336.asp
[4] www.riotinto.com/whatweproduce/572_iron_ore_3565.asp
[5] www.riotinto.com/whatweproduce/452_diamonds_568.asp
[6] www.riotinto.com/whatweproduce/452_gold_and_silver_4735.asp
[7] 30 Jun 2009, www.bhpbilliton.com/bb/aboutUs/companyOverview/ourProfile.jsp
[8] BHP Billiton annual report 2009
[9] www.vale.com/vale_us/media/PREPORT4T09i.pdf
[10] www.vale.com/vale_us/media/PREPORT4T09i.pdf
[11] www.vale.com/vale_us/media/PREPORT4T09i.pdf
[12] www.fundinguniverse.com/company-histories/Rio-Tinto-PLC-Company-History.html
[13] www.fundinguniverse.com/company-histories/Rio-Tinto-PLC-Company-History.html
[14] www.fundinguniverse.com/company-histories/Rio-Tinto-PLC-Company-History.html
[15] www.fundinguniverse.com/company-histories/Rio-Tinto-PLC-Company-History.html
[16] www.fundinguniverse.com/company-histories/Rio-Tinto-PLC-Company-History.html
[17] www.crocodyl.org/wiki/rio_tinto_group
[18] www.fundinguniverse.com/company-histories/Rio-Tinto-PLC-Company-History.html
[19] www.fundinguniverse.com/company-histories/Rio-Tinto-PLC-Company-History.html
[20] www.fundinguniverse.com/company-histories/Rio-Tinto-PLC-Company-History.html
[21] www.riotinto.com/whoweare/timeline.asp
[22] www.telegraph.co.uk/finance/2811968/A-history-of-Rio-Tinto.html
[23] www.riotinto.com/whoweare/timeline.asp
[24] www.crocodyl.org/wiki/rio_tinto_group
[25] www.eco-action.org/ssp/bougainville.html
[26] www.riotinto.com/whoweare/timeline.asp
[27] www.riotinto.com/whoweare/timeline.asp
[28] www.minesandcommunities.org//article.php?
[29] http://news.bbc.co.uk/1/hi/business/8575737.stm
[30] www.businessweek.com/news/2010-03-29/rio-s-stern-hu-found-guilty-in-shanghai-court-update1-.html
- Industry areas
- Market share / importance
- History and strategy
Overview
Industry area Rio Tinto Group is an Anglo-Australian mining company involved in exploration, extraction and refinement of a variety of metals and minerals including energy products such as coal and uranium. Market Share / Importance Rio Tinto is one the world's largest mining companies with operations on six continents. US Fortune magazine has Rio Tinto listed as the 134th biggest company in the world.1 It is the world's largest producer of aluminium and second biggest iron ore producer. In 2009, Rio Tinto's net earnings amounted to US $4.9 billion.2 Rio Tinto is in fact two conjoined companies Rio Tinto plc. and Rio Tinto Limited, which operate as a dual listed company (DLC). The two companies hold separate shareholder lists, but investors own the assets of the both branches together. Rio Tinto plc and Rio Tinto Limited are listed on London's FTSE 100 and Sydney's S&P;/ASX 200 stock exchanges respectively. Key figures Market capitalisation (July 2009) = US$63 billionOverall employees = 102,000 Annual production (2008):
Bauxite – 34,998,000 tonnes3
Iron ore – 153,394,000 tonnes4
Diamonds – 20,016,000 carats5
Gold (mined) – 501,000 ounces6 For comparison: BHP Billiton
Market capitalisation - US$142.9 billion
Employees = 41,0007
Annual production (2008):
Iron ore - 112,260,000 tonnes
Diamonds – 3,349,000 carats
Gold – 161,500 ounces8 Vale
Market capitalisation = US$93.36 billion
2008 production (is this equivalent to annual production):
Bauxite – 11,628,000 tonnes9
Iron ore – 301,696,000 tonnes10
Gold – 85,000 ounces11 History The Rio Tinto Group comprises Rio Tinto plc (UK) and Rio Tinto Limited (Australia) which were founded in 1873 and 1905 respectively. The original Rio Tinto company was set up by a group of investors including Matheson & Co. and Deutsche Bank, who together bought the Rio Tinto mine, in Huelva, Spain, from the the Spanish government for $3.7 million in 1873.12 By the end of the 1880's Rio Tinto was the world's leading copper producer.13 Thus in its early years RTC returned huge profits to its investors - introducing new technologies and collaborating with competitors to fix prices.14 The company repeatedly refused to raise wages, despite increased revenues, instead offering workers services such as company accommodation, shops and schools15. However by the 1920's labour struggles and political difficulties emerging from nationalist attempts to reclaim profits from the mines created difficulties for Rio Tinto. During the Spanish civil war Rio Tinto infamously applauded Franco's forces for assassinating strikers and a group of radical miners who occupied their mines. Turmoil caused by this war and then the second world war led to production difficulties and Rio Tinto saw a decline in profits, around this time the copper reserves also began drying up.1617 Growing difficulties at the Spanish operation led Rio Tinto to expand its business elsewhere. Its first major acquisition was of a significant portion of the rhodesian copper belt in 193018. Through merging RTC's assets with those of Anglo-American, the Rhokana corporation was formed which swiftly became a leading copper producer worldwide.19 Then in 1955 RTC began its first foray into uranium mining – acquiring a majority share in the Algom mines in Lake Elliot, Canada. By the end of the 1950's Rio Tinto Algom was producing around 15% of the world's uranium oxide.20 In 1962 the Rio Tinto company merged with the Consolidated Zinc corporation to form RTZ (initially Rio Tinto-Zinc corporation) and its Australian subsidiary CRA (initially Conzinc Riotinto of Australia limited). This allowed Rio Tinto to expand its operations significantly and a boom period followed the merger. Between 1962 and 1968 the two groups discovered and began operating numerous mines worldwide including the Rossing Uranium mine and Bougainville Copper as well as acquiring several smaller companies.2122 Due to their success, from 1968 to 1987 RTZ and CRA expanded their operations beyond mining, buying up shares in many different industries such chemicals, oil and gas. However in 1988 the company decided return its focus to core mining activities and proceeded to sell off all non-core assets.23 In 1989 Rio Tinto purchased all of BP's mineral operations, spread over 15 countries in a US$4.3 billion deal that made RTZ one of the largest mining groups in the world.24 In the same year RTZ's pacific subsidiary Bougainville Copper was forced to cease operations due to militant attacks on its mine by indigenous islanders.25 In 1995 RTZ merged with its Australian subsidiary CRA to form Rio Tinto - a dual listed company and then in 1997 RTZ and CRA were renamed Rio Tinto Plc and Rio Tinto Limited, collectively known as the Rio Tinto Group.26 In 2007 Rio Tinto acquired the Canadian aluminium producer Alcan Inc. in a US$38 billion deal that made Rio Tinto the world's leading aluminium producer.27 Due to mounting debts in recent years Rio Tinto has been forced to seek capital investments and in the same year sold a 12% shareholding to a joint venture of China's national aluminium company Chinalco and American company Alcoa.28 Relations with Chinalco have since tightened with the signing in March 2010 of a US$1.3 billion deal for Chinalco to acquire a 47% stake in the Simandou Iron ore mine in Guinea.29 Despite the increasing interest of Chinese business in Rio Tinto, on 5th July 2009 four Rio Tinto employees were detained in Shanghai on alleged corruption charges and all found guilty in March 2010, with sentences varying from 7 to 14 years.30
References
[1] http://money.cnn.com/magazines/fortune/global500/2009/full_list/101_200.html
[2] www.riotinto.com/annualreport2009/performance/index.html
[3] www.riotinto.com/whatweproduce/452_aluminium_4336.asp
[4] www.riotinto.com/whatweproduce/572_iron_ore_3565.asp
[5] www.riotinto.com/whatweproduce/452_diamonds_568.asp
[6] www.riotinto.com/whatweproduce/452_gold_and_silver_4735.asp
[7] 30 Jun 2009, www.bhpbilliton.com/bb/aboutUs/companyOverview/ourProfile.jsp
[8] BHP Billiton annual report 2009
[9] www.vale.com/vale_us/media/PREPORT4T09i.pdf
[10] www.vale.com/vale_us/media/PREPORT4T09i.pdf
[11] www.vale.com/vale_us/media/PREPORT4T09i.pdf
[12] www.fundinguniverse.com/company-histories/Rio-Tinto-PLC-Company-History.html
[13] www.fundinguniverse.com/company-histories/Rio-Tinto-PLC-Company-History.html
[14] www.fundinguniverse.com/company-histories/Rio-Tinto-PLC-Company-History.html
[15] www.fundinguniverse.com/company-histories/Rio-Tinto-PLC-Company-History.html
[16] www.fundinguniverse.com/company-histories/Rio-Tinto-PLC-Company-History.html
[17] www.crocodyl.org/wiki/rio_tinto_group
[18] www.fundinguniverse.com/company-histories/Rio-Tinto-PLC-Company-History.html
[19] www.fundinguniverse.com/company-histories/Rio-Tinto-PLC-Company-History.html
[20] www.fundinguniverse.com/company-histories/Rio-Tinto-PLC-Company-History.html
[21] www.riotinto.com/whoweare/timeline.asp
[22] www.telegraph.co.uk/finance/2811968/A-history-of-Rio-Tinto.html
[23] www.riotinto.com/whoweare/timeline.asp
[24] www.crocodyl.org/wiki/rio_tinto_group
[25] www.eco-action.org/ssp/bougainville.html
[26] www.riotinto.com/whoweare/timeline.asp
[27] www.riotinto.com/whoweare/timeline.asp
[28] www.minesandcommunities.org//article.php?
[29] http://news.bbc.co.uk/1/hi/business/8575737.stm
[30] www.businessweek.com/news/2010-03-29/rio-s-stern-hu-found-guilty-in-shanghai-court-update1-.html