Earnings Growth In Rio Tinto's First Half.LONDON--(BUSINESS WIRE)--Sept. 11, 1997-- -- Rio Tinto's first half 1997 earnings at $595 million were 8 per cent higher than in the first half of 1996. -- Good volume gains were not fully reflected in higher earnings because of lower non-operational credits compared with first half 1996. -- Benefits from rationalisation Noun 1. rationalisation - (psychiatry) a defense mechanism by which your true motivation is concealed by explaining your actions and feelings in a way that is not threatening rationalization since the merger have so far been largely offset by one-off reorganisation Noun 1. reorganisation - the imposition of a new organization; organizing differently (often involving extensive and drastic changes); "a committee was appointed to oversee the reorganization of the curriculum"; "top officials were forced out in the cabinet costs, but ongoing annual cost savings will amount to about $250 million before tax. -- There were good efficiency gains, including improvements in previously under-performing areas. -- Demand for minerals and metals was sustained by continuing global economic growth driven by more mature economies. Mr Robert Wilson Robert Wilson may refer to:
Six months to 30 June
- US dollars 1997 1996 Change
Group sales revenue $4,571m $4,003m +14%
Profit before tax $975m $891m +9%
Net attributable
profit $595m $552m +8%
Adjusted earnings $595m $552m +8%
Earnings per share 42.5c 39.5c +8%
Adjusted earnings
per share 42.5c 39.5c +8%
All $ are US$, unless otherwise stated.
-0-
Interim dividends equivalent to 16.5 US cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. have been declared, the same as the interim dividends for 1996. The amounts payable are 10.37 pence per share (1996: 10.60p) and 22.58 Australian cents per share (1996:20.65c),respectively. First Half Review Mr Leon Davis Leon Davis may refer to:
Aluminium smelters of the world [1] [2] [3] [4] Country Location Coordinates Plant Capacity (kt/year) Company Name Ownership lifted the Group's production. The recently acquired Caballo Rojo mine in the US Powder River Basin The Powder River Basin is a region in southeast Montana and northeast Wyoming about 120 miles east to west and 200 miles north to south known for its coal deposits. It is both a topographic drainage and geologic structural basin. , which is already fully integrated with the adjacent Cordero mine, helped to increase the Group's coal production. "The Group's restructuring along product lines announced in March is now complete. This flatter structure has improved our focus and decision making and will yield considerable cost benefits. In June, we put our technological skills onto a global basis to optimise transfer of best practice across the Group. "Most of the significant cost savings which we have already achieved are not yet reflected in the Group results because of one-off costs incurred in putting them into effect. Nevertheless, they are real and permanent. In Comalco's case, they have already started to come through. When all the reorganisation measures taken since the merger are complete by the end of this year, the on-going annual cost savings will amount to about $250 million before tax. "Major development projects are progressing well. The Boyne Island aluminium smelter The Boyne Island aluminium smelter is located on Boyne Island, Queensland, Australia, approximately 20 km south of the port of Gladstone. The smelter has a production capacity of 545,000 tonnes of aluminium per year [1] The operating company Boyne Smelters Ltd is 59. expansion is coming on line ahead of schedule and on budget. Modifications to the Kennecott smelter were undertaken in May and design capacity is expected by year end, allowing a greater focus on further cost improvements. Construction of QIT's new Upgraded Slag (UGS UGS In currencies, this is the abbreviation for the Uganda Shilling. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) plant is almost complete. At Grasberg, commissioning of the fourth concentrator is scheduled to begin early next year. Development activity continues at Escondida to realise the full capacity of the Phase 3 expansion, and the oxide leaching project and Phase 4 expansion study are underway." Outlook Mr Robert Wilson, said: "Global economic growth during 1997 has been stronger than predicted at the start of the year with consequent benefits for the metals and minerals markets. The OECD OECD: see Organization for Economic Cooperation and Development. countries collectively expect to record their fastest annual growth since 1989. The US upswing Upswing An upward turn in a security's price after a period of falling prices. continues to display remarkable resilience, whilst currency weaknesses have helped to stimulate export-led growth in Japan and continental Europe Continental Europe, also referred to as mainland Europe or simply the Continent, is the continent of Europe, explicitly excluding European islands and, at times, peninsulas. . Despite this robust growth, OECD inflation has fallen to its lowest rate for thirty years. "US growth will surely ease back at some point, but may well be balanced by faster growth in Europe and Japan, where monetary policies have been loosened. We expect continued strong growth from China. Recent turmoil in the "Tiger" economies of southeast Asia Southeast Asia, region of Asia (1990 est. pop. 442,500,000), c.1,740,000 sq mi (4,506,600 sq km), bounded roughly by the Indian subcontinent on the west, China on the north, and the Pacific Ocean on the east. casts a bit of a shadow. Although consumption in these countries is still relatively modest compared with that in more mature economies, it has been growing rapidly. We may be witnessing an adjustment from the exceptional growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. of the early 1990s to those more sustainable for the long haul Long distance. Long haul implies traversing a state or a country. Contrast with short haul. . At present, however, the general prospect is for global economic growth to be sustained at a satisfactory rate into 1998 and for continued strong demand for minerals and metals." Foreign Income Dividends "The UK Government has announced the withdrawal of Foreign Income Dividends after April 1999. If implemented without modification, this would have an important adverse effect on Rio Tinto plc and other British companies which have most of their operations outside the UK. The Government has, however, recognised this. We believe the Government is committed to introduce measures to remedy the position and trust that this will be effected in the next Finance Act," Mr Wilson said. HALF YEAR 1997 FINANCIAL RESULTS Sales Revenues Group sales Group sales Block sale (of large amounts) of securities to institutional investors. group sales The distribution of a new security issue to institutional clients. revenue was $4,571 million, some 14 per cent higher than the $4,003 million for the comparable period in 1996. The increase resulted from higher sales volumes for most of the Group's products, particularly for copper and iron ore. Lower average copper and gold market prices in the period were more than offset by the impact of deferred pricing of copper shipments which are provisionally priced at the end of each reporting period. Profit Profit before tax was 9 per cent higher at $975 million (1996: $891 million). The tax charge increased to 33 per cent of pre- tax profit compared with 30 per cent in the same period last year. The 1996 tax rate included the benefit of a reduction in South African tax and a high level of Advance Corporation Tax recoveries in the UK. Net profit attributable to shareholders increased by 8 per cent to $595 million (1996: $552 million). Cash Flow Cash flow from operating activities increased to over $1 billion, reflecting higher profit from mining operations and a smaller increase in working capital than in the first half of 1996. Dividend receipts from associates were $270 million higher than in 1996. Higher capital expenditure totalling $966 million (1996: $738 million) included expenditure on the Grasberg expansion and QIT's UGS project, together with continuing expenditures on the Palabora underground development and Bingham Canyon Bingham Canyon or Bingham, uninc. village, N central Utah, near Tooele, in a canyon of the Oquirrh Mts. SW of Salt Lake City. At first (1848) a farm of the Mormons Thomas and Sanford Bingham, it became in the 1860s a roaring mining town, dealing tailings Tailings (also known as tailings pile, tails, leach residue, or slickens[1]) are the materials left over[2] after the process of separating the valuable fraction from the worthless fraction of an ore. dam. Balance Sheet The higher level of capital expenditure was reflected in an increase of $702 million in net debt to $3,105 million in the half year. Net debt as a percentage of total capital increased to 27 per cent from 22 per cent at the end of 1996. Net interest, including capitalised interest, was covered 16 times by preinterest profits, including dividends from associates. Dividends Interim dividends equivalent to 16.5 US cents per share, the same as for 1996, have been declared by Rio Tinto plc and Rio Tinto Limited. As previously announced, dividends are determined in US dollars but Rio Tinto Limited's dividends are declared and paid in Australian dollars Noun 1. Australian dollar - the basic unit of money in Australia and Nauru dollar - the basic monetary unit in many countries; equal to 100 cents and Rio Tinto plc's dividends are declared and paid in pounds sterling, in both cases converted at the exchange rates applicable two days prior to the announcement of dividends. Rio Tinto Limited shareholders will be paid an interim dividend of 22.58 Australian cents per ordinary share (1996: 20.65 cents). This will be fully franked at the tax rate of 36 per cent. Rio Tinto plc shareholders will be paid an interim dividend of 10.37 pence per ordinary share (1996: 10.60p) as a Foreign Income Dividend. The respective dividends will be paid on 20 October 1997 to Rio Tinto plc shareholders registered at close of business on 26 September 1997, and to Rio Tinto Limited shareholders registered at close of business on 30 September 1997, and to Rio Tinto plc bearer One who is the holder or possessor of an instrument that is negotiable—for example, a check, a draft, or a note—and upon which a specific payee is not designated. shareholders on or after 20 October 1997, against coupon 77. The exdividend date for both companies will be 22 September 1997. Dividends to Rio Tinto ADR ADR - Astra Digital Radio holders will be paid on 21 October 1997. Dividends of 1.6625 pence per Rio Tinto plc 'A' preference share and 1.75 pence per Rio Tinto plc 'B' preference share for the second half of 1997 will be paid on 2 January 1998 to holders registered on 21 November 1997, and to 'B' preference bearer shareholders on or after 2 January 1998 against coupon 71. The exdividend date will be 17 November 1997. Dividends - Rio Tinto plc Advance Corporation Tax (ACT) is currently payable by UK companies when they pay dividends. ACT is recoverable within certain limits by deduction from UK corporation tax payable on UK taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. , but may not be fully recoverable by companies such as Rio Tinto plc which have only a small proportion of such income. Foreign Income Dividends (FIDs) were introduced to enable such companies to obtain a refund of ACT where dividends have been paid out of income which has suffered taxation outside the UK. The UK Government has announced the withdrawal of FIDs after April 1999. The Government is expected to introduce further measures to protect UK companies with a high proportion of foreign income from suffering a major increase in their tax charge as a result of irrecoverable ACT. ACT is not payable in respect of Australian dividends and has no connection with Australian franking credits A franking credit is a nominal unit of tax paid by companies paying tax in countries that have a dividend imputation system. Franking credits are passed on to shareholders along with dividends. . The resolution of this issue is, however, important for all Rio Tinto shareholders as it will have implications for the Group tax charge and earnings. The UK Finance (No. 2) Act 1997 also contains provisions to prevent pension providers and most UK corporate shareholders from reclaiming tax credits on conventional dividends paid on or after 2 July 1997. If the effect of these changes continues, Rio Tinto plc intends to designate all its future dividends paid before 6 April 1999 as FIDs. Under current legislation, it is not possible to offer a scrip dividend scrip dividend An unusual type of dividend involving the distribution of promissory notes that call for some type of payment at a future date. Scrip dividends generally signal that a firm is short of cash. Compare liability dividend. alternative to FIDs. REVIEW OF OPERATIONS ALUMINIUM 1997 first half earnings $56 million, up 17% aluminium metal production up 11% at 204,000 tonnes Comalco's earnings improved, largely due to higher smelter production volumes and lower costs at Comalco managed operations in Australia and New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. . Construction of the new reduction line and associated facilities at the Boyne Island smelter proceeded on budget, six months ahead of schedule, and was 98 per cent complete by the end of the first half of 1997. In the UK, production at Anglesey Aluminium Anglesey Aluminium Metal Ltd. is a joint venture between Rio Tinto Group, Kaiser Aluminium and Chemical Corporation. Its corporate motto is If it's not safe, don't do it that way. was marginally lower and earnings were adversely affected by the stronger pound. BORATES 1997 first half earnings $72 million, up 12% production remained virtually unchanged at 282,000 tonnes Refined borate borate /bo·rate/ (bor´at) a salt of boric acid. bo·rate n. A salt or ester of boric acid. borate any salt of boric acid. production was virtually unchanged and benefitted from improved process recoveries. Overall sales volumes reflected gains in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and Asia Pacific, partially offset by reductions in Europe. Average prices reflected the general weakening of European currencies against the US dollar. COAL 1997 first half earnings $91 million, up 15% production at 40 million tonnes, up 33% Despite healthy demand, spot prices for internationally traded coal continued to decline during the first half of 1997. Australia and Indonesia Rio Tinto's Australian coal output at 10.9 million tonnes was 12 per cent higher than in the same period in 1996. Despite depressed prices Depressed price In the context of stocks, stock whose market price is low in comparison to stocks in its sector. , Pacific Coal's Blair Athol Blair Athol may refer to several places:
tr.v. o·ver·bur·dened, o·ver·bur·den·ing, o·ver·bur·dens 1. To burden with too much weight; overload. 2. To subject to an excessive burden or strain; overtax. n. 1. removal, but industrial action at its Hunter Valley Hunter Valley, region of New South Wales, SE Australia. The Hunter River and its tributaries occupy this valley S of the Mt. Royal Range. The land in the upper valley is used for livestock grazing, dairying and agriculture. mine resulted in an 8 per cent decrease in output. In Indonesia, Kaltim Prima's total production increased by 30 per cent to 6.2 million tonnes during the first half of 1997, and is expected to exceed 13 million tonnes for the whole year. North and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. Kennecott Energy's coal output in the US increased by 30 per cent to 26 million tonnes due to the acquisition of the Caballo Rojo mine which has been integrated with the adjacent Cordero mine. The integration secured the cost savings expected. Production increased at the Antelope and Decker mines, but lower spot sales and railcar availability impacted production at Cordero and Spring Creek A spring creek is a stream that flows from a spring. Spring Creek may refer to any of the following specific places:
In June 1997, a consortium in which Rio Tinto has a onethird share, agreed to merge their interests in the Central Cerrejon and Oreganal leases in Colombia, with a view to developing a 16 million tonnes per annum Per annum Yearly. operation by 2002. The partners will be responsible for operations and marketing, with Rio Tinto providing managerial expertise. This agreement is subject to due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. , which is well advanced. At the end of August, the same consortium successfully tendered for the Cerrejon South lease. Subject to proving the necessary coal reserves, the combined three-block operation could increase its anticipated production beyond the 16 million tonnes per annum level, or extend the life of the mine, or both. COPPER AND GOLD 1997 first half earnings $262 million, up 38% Copper 1997 first half production 379,000 tonnes, up 4% average LME See London Metal Exchange. LME See London Metal Exchange (LME). price 112c /lb, down 3% At Kennecott Utah Copper in the US, mine production for the first half of 1997 rose by 10 per cent to 153,400 tonnes of copper in concentrate, with higher ore grade Ore grade is a measure that describes the concentration of a valuable natural material (such as metals or minerals) in its surrounding ore. Ore grade is used to assess the economic feasibility of a mining operation: the cost of extracting a natural material from its ore is directly and better throughput partially offset by lower recovery. At the Kennecott smelter, refined metal output also increased. Modifications to the flash converter and installation of a new anode anode (ăn`ōd), electrode through which current enters an electric device. In electrolysis, it is the positive electrode in the electrolytic cell. anode Terminal or electrode from which electrons leave a system. casting wheel were undertaken in May. The facility is on course to achieve full capacity by year end. At Escondida in Chile, total copper production of 467,900 tonnes was 14 per cent higher than in the first half of 1996. Significantly improved performance at the concentrate leach plant at Coloso increased cathode output by 56 per cent over the same period in 1996. Total production at Grasberg in Indonesia increased by over 3 per cent to 256,300 tonnes, due to slightly higher copper grades and improved recovery rates. In South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. , Palabora's total copper in concentrate output was down 11 per cent to 62,386 tonnes due to lower head grade material processed. However, refined copper production was up almost 3 per cent, due to higher smelting smelting, in metallurgy, any process of melting or fusion, especially to extract a metal from its ore. Smelting processes vary in detail depending on the nature of the ore and the metal involved, but they are typified in the use of the blast furnace. rates achieved. Gold 1997 first half production 1.04 million ounces, up 15% average London price $347 per ounce, down 12% The Group's gold production increased as a result of higher grade and throughput at Kelian in Indonesia and at Kennecott Utah Copper and Barneys Canyon, and from the start up of Pipeline, all in the US. Refined metal output at Kennecott also increased. Development of the Lihir Gold project in Papua New Guinea Papua New Guinea (păp`  ə, –y was on
schedule with the first gold from the oxide ore produced in May.
Commissioning of the sulphide sulphide: see sulfide. ore processing facilities began in August.
Expansion of Morro do Ouro in Brazil progressed ahead of schedule, with
completion expected by the end of 1997. Completion of engineering works
at the Kelian mine provided access to additional reserves, extending the
mine life.IRON ORE 1997 first half earnings $127 million, up 23% production 27.5 million tonnes, up 4% Hamersley Iron in Australia achieved its highest shipments for any half year. Iron ore demand remained strong in all markets, particularly China, with prices for delivery in 1997/98 increased by 1 per cent for fines, but unchanged for lump ore. At Marandoo, total production reached a record for the half year. At Paraburdoo, a new fleet of haul trucks was commissioned, reducing the size of the fleet from 13 to 8. Output at the Channar mine was 27 per cent higher than in the same period last year. TITANIUM DIOXIDE FEEDSTOCK feed·stock n. Raw material required for an industrial process. Noun 1. feedstock - the raw material that is required for some industrial process raw material, staple - material suitable for manufacture or use or finishing 1997 first half earnings $72 million, down 1% production 696,000 tonnes, down 5% Earnings from the Iron & Titanium business mirrored market conditions for titanium dioxide feedstock which remained stable as growth in demand was balanced by new capacity coming on stream. Production was slightly down from last year because of exceptional furnace maintenance and a reduced need to build further inventory at the Sorel Sorel (sôrĕl`), city (1991 pop. 18,786), S Que., Canada, at the confluence of the St. Lawrence and Richelieu rivers. It is a grain-shipping center with an important shipbuilding industry. smelter in Canada, in preparation for the UGS plant commissioning. Market conditions for ferrous ferrous (fĕr`əs), iron in the +2 valence state. Containing or having to do with iron. The difference between ferrous and ferric is the number of valence electrons they contain (ferrous contains two and ferric contains three), which products and zircon zircon Silicate mineral, zirconium silicate, ZrSiO4, the principal source of zirconium. Zircon is widespread as an accessory mineral in acid igneous rocks; it also occurs in metamorphic rocks and, fairly often, in detrital deposits. continued to be satisfactory. OTHER METALS AND MINERALS Diamonds 1997 first half production at 9.8 million carats, down 23% Total ore processed at the Argyle diamond mine The Argyle diamond mine () is a diamond mine located in the north-east of Western Australia. in Western Australia Western Australia, state (1991 pop. 1,409,965), 975,920 sq mi (2,527,633 sq km), Australia, comprising the entire western part of the continent. It is bounded on the N, W, and S by the Indian Ocean. Perth is the capital. was almost 9 per cent below the comparable 1996 level. This was primarily the result of restricted mining activities following higher than average rainfall in the first quarter of this year. Alluvial al·lu·vi·al adj. Of, relating to, or found in alluvium: alluvial soil; alluvial gold. alluvial Adjective of or relating to alluvium Noun ore processed was further reduced as a result of field screening difficulties. Diamond production was almost 23 per cent below the comparable level for 1996 due to a combination of lower grades and lower throughput. Industrial Salt 1997 first half production of 1.5 million tonnes, up 19% Salt harvested at the Dampier and Lake MacLeod
Lake Macleod (located at salt fields in Western Australia increased and prices improved over comparable 1996 levels. Expansion of the Dampier field to 4 million tonnes per annum will be completed by the end of October 1997. Talc talc, mineral ranging in color from white through various shades of gray and green to the red and brown of impure specimens, translucent to opaque, and having a greasy, soapy feel. 1997 first half production at 594,000 tonnes, up 7% The improvement in the Luzenac Group's production reflected sustained North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. demand and a slight recovery in the major European markets from the previous year's weakness. Uranium 1997 first half production at 1,098 tonnes, up 14% After peaking at $16 per lb in late 1996, spot prices for uranium oxide Uranium oxide is an oxide of the element uranium. The metal uranium forms several oxides:
tr.v. in·su·lat·ed, in·su·lat·ing, in·su·lates 1. To cause to be in a detached or isolated position. See Synonyms at isolate. 2. from current spot prices. However, due to the weak market, additional sales have not been secured and plans to return to higher levels of production have been delayed. At Kintyre in Western Australia, exploration continues but development of the project has been delayed until the uranium market The uranium market, like all commodity markets, has a history of volatility, moving not only with the standard forces of supply and demand, but also to whims of geopolitics. It has also evolved particularities of its own in response to the unique nature and use of this material. improves. Zinc Average zinc price increased by 19% to 56c /lb Higher zinc prices were reflected in improved earnings from the Norzink smelter in Norway where production and operations also improved. Output was some 5 per cent higher than in the comparable period of 1996. TECHNOLOGY Rio Tinto's new Technology Group is now organised in functional units, providing technical services, project management support, technical evaluation The study and investigations by a developing agency to determine the technical suitability of material, equipment, or a system for use in the Military Services. See also operational evaluation. , research and development, Group purchasing, health, safety and environment, and information technology. This will assist the transfer of best practice in engineering and environmental matters, and will also bring together the Group's consolidated buying power Buying Power The money an investor has available to buy securities. In a margin account, the buying power is the total cash held in the brokerage account plus maximum margin available. Also referred to as "Excess Equity. . Research and Technology Development, based in Australia, is being refocused towards those areas which will provide the greatest benefit, notably in process design, environmental technology, and knowledgebased systems. Some areas of activity were no longer integral to Rio Tinto's primary objectives. Thus Minenco, which has historically provided in-house engineering services in the Australia Pacific region, was sold to a global engineering group. These changes are expected to reduce fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). , resulting in net savings of $15 million per annum from 1998 onwards. NEW PROJECT DEVELOPMENT UPDATE Net capital expenditure rose by 31 per cent to $966 million in the period. Construction of QIT's UGS plant is nearly complete. Sections of the plant will be commissioned sequentially in the coming months. Additional capital expenditure has been incurred on process improvements and to make the plant more readily expandable. In the near term, this allows the production of an additional 100,000 tonnes per year of heat treated slag (HTS HTS Heights HTS Harmonized Tariff System HTS High Throughput Screening (biomolecular assay screening) HTS High-Throughput Screening (Pharmaceutical Industry) HTS Harmonized Tariff Schedule ), an intermediate feedstock in the production of UGS. At the Grasberg mine The Grasberg mine is the largest gold mine and the third largest copper mine in the world. It is located in the province of Papua in Indonesia near , and is owned by the Freeport-McMoRan company based out of the United States (90. , the Fourth Concentrator Project was approximately 50 per cent complete at the end of the first half of 1997. The project allows production capacity of at least 190,000 to 200,000 tonnes of ore per day, subject to certain approvals. Completion is planned during the first quarter of 1998. Rio Tinto's $750 million obligation to the financing of this development will shortly be fully committed (Law) committed to prison for trial, in distinction from being detained for examination. See also: Fully . At Escondida, the $470 million oxide leaching project is now underway. Oxidized oxidized having been modified by the process of oxidation. oxidized cellulose see absorbable cellulose. mineralisation, which otherwise would have been stockpiled, will be heap leached to produce 125,000 tonnes per annum of copper cathode. The first cathodes are due to be produced in December 1998. Construction at the Palabora underground development progressed on schedule and within budget. Full production is expected to be achieved when the present open pit operations cease in the year 2002. At Lake MacLeod in Western Australia a new gypsum gypsum (jĭp`səm), mineral composed of calcium sulfate (calcium, sulfur, and oxygen) with two molecules of water, CaSO4·2H2O. It is the most common sulfate mineral, occurring in many places in a variety of forms. plant was commissioned in April with the first shipment in August. Approximately 0.5 million tonnes of gypsum is expected to be shipped during 1997. In Spain, feasibility studies The analysis of a problem to determine if it can be solved effectively. The operational (will it work?), economical (costs and benefits) and technical (can it be built?) aspects are part of the study. Results of the study determine whether the solution should be implemented. on the Las Cruces Las Cruces (läs kr `sĭs), city (1990 pop. 62,126), seat of Dona Ana co., SW N.Mex., on the Rio Grande, in a farm area irrigated by the Elephant Butte system; founded 1848, inc. 1907. copper
mineralisation discovery in Andalucia continue, and will take up to 24
months to complete.During the first half of 1997, additional drilling and other studies improved the understanding of the diamondiferous kimberlites at the Diavik project in Canada. Overall, the results represent a small improvement relative to earlier resource data. The estimated grade in the A154 South resource is now 4.6 carats per tonne compared with 4.2 carats per tonne, and the estimated tonnage TONNAGE, mar. law. The capacity of a ship or vessel. 2. The act of congress of March 2, 1799, s. 64, 1 Story's L. U. S. 630, directs that to ascertain the tonnage of any ship or vessel, the surveyor, &c. in the A154 North resource is now 11.5 million tonnes compared with 8.6 million tonnes. The A418 resource showed minor reduction in estimated tonnage and grade, whilst the A21 resource had a lower estimated tonnage at a higher estimated grade. In Australia, final agreement for the $515 million Yandicoogina iron ore project was reached with the Gumala Aboriginal Corporation in March. Definitive feasibility studies for a 30 year mine, initially producing 15 million tonnes a year, have been completed. EXPLORATION Rio Tinto's exploration charge to earnings in the half year was $71 million, $20 million lower than in the same period in 1996. The review of exploration in 1996 also resulted in better concentration of efforts producing promising results. Among these, the significance of encouraging work at the Penasquito polymetallic prospect in Mexico is being evaluated. Separately, a farm-in agreement was entered into, subject to due diligence, to acquire an interest in a neighbouring property with base metal potential. The property includes an operating mine. In southeast Asia, diamond drilling Diamond Drilling is a highly specialized industry used for mineral exploration around the world. Most commonly using wireline and core bits with diamond encrusted matrix. To drill holes to max depths of twelve thousand feet, for the recovery of core used in verifying mineral at the Sepon gold project in Laos focused on the shallow portions of the deposits. An inferred resource in excess of 1.5 million ounces of gold has been defined and additional drilling and metallurgical met·al·lur·gy n. 1. The science that deals with procedures used in extracting metals from their ores, purifying and alloying metals, and creating useful objects from metals. 2. testing is now in progress. In addition to further progress on the Kucing Liar programme, deep drilling of the Grasberg porphyry Porphyry, Greek scholar Porphyry (pôr`fĭrē), c.232–c.304, Greek scholar and Neoplatonic philosopher. He studied rhetoric under Cassius Longinus and philosophy under Plotinus. is underway from the Amole amole: see soap plant. Tunnel. The first drill hole included 160 metres averaging nearly 2 per cent equivalent copper, immediately below the current block cave reserve. Progress is also being made on the Wabu property where drilling is adding to gold mineralisation and testing is continuing on potential copper/gold porphyry targets. -0-
PROFIT AND LOSS ACCOUNT
First First First First First First
Half Half Half Half Half Half Year
1997 1996 1997 1996 1997 1996 1996
A$m A$m m m US$m US$m US$m
(in pounds)
5,910 5,176 2,803 2,621 Group turnover 4,571 4,003 8,448
Share of
associates'
(1,034) (812) (490) (411) turnover (800) (628) (1,372)
4,876 4,364 2,313 2,210 Turnover 3,771 3,375 7,076
(4,041) (3,522) (1,916) (1,784) Operating costs (3,125) (2,724) (5,865)
835 842 397 426 Operating profit 646 651 1,211
Share of
associates'
472 313 224 158 profit 365 242 553
Profit on ordinary
activities before
1,307 1,155 621 584 interest 1,011 893 1,764
Net interest
(47) (3) (22) (1) payable (36) (2) (33)
Profit on ordinary
activities
1,260 1,152 599 583 before taxation 975 891 1,731
(419) (349) (199) (177) Taxation (324) (270) (548)
Profit on ordinary
activities after
841 803 400 406 taxation 651 621 1,183
Attributable to
outside shareholders
(72) (89) (34) (45) (equity) (56) (69) (87)
Profit for the
769 714 366 361 period 595 552 1,096
Dividends to
(299) (299) (142) (151) shareholders (231) (231) (694)
Retained profit
470 415 224 210 for the period 364 321 402
Earnings per
ordinary
54.9c 51.1c 26.1p 25.8p share 42.5c 39.5c 78.3c
769 714 366 361 Adjusted earnings 595 552 1,096
Adjusted earnings
54.9c 51.1c 26.1p 25.8p per share 42.5c 39.5c 78.3c
Dividends per share
- - 10.37p 10.60p Rio Tinto plc 16.5c 16.5c 51.0c
Rio Tinto
22.58c 20.65c - - Limited 16.5c 16.5c 51.0c
Financial ratios
Profit before interest/turnover 22.1% 22.3% 20.9%
Interest cover(times) 16 24 21
Tax rate 33.2% 30.3% 31.7%
Net profit/average
shareholders' funds (a) 15.6% 15.3% 15.1%
Net debt to total capital 26.9% 18.8% 22.4%
(a) The half year figures for this ratio have been annualised.
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CASH FLOW STATEMENT
First First First First First First
Half Half Half Half Half Half Year
1997 1996 1997 1996 1997 1996 1996
A$m A$m m m US$m US$m US$m
(in pounds)
Net cash flow
from operating
1,336 1,139 634 576 activities 1,033 881 2,002
Dividends from
associated
companies
477 128 226 65 and investments 369 99 309
(123) (44) (58) (22) Net interest paid (95) (34) (76)
Dividends paid to
outside
(56) (101) (26) (51) shareholders (43) (78) (105)
Returns on investment
and servicing of
298 (17) 142 (8) finance 231 (13) 128
(262) (177) (124) (90) Tax paid (203) (137) (313)
Purchase of property,
plant and
(1,135) (809) (538) (410) equipment (878) (626) (1,516)
Funding of Group
share of associates'
capital
(136) (168) (64) (85) expenditure (105) (130) (323)
Other funding provided
to associated
(344) - (163) - companies (266) - (67)
Exploration and
evaluation
(150) (177) (71) (90) expenditure (116) (137) (252)
Sale of property,
plant and
22 23 10 12 equipment 17 18 69
Sale of other
9 71 4 36 investments 7 55 82
Capital expenditure
and financial
(1,734) (1,060) (822) (537) investment (1,341) (820) (2,007)
Purchase of subsidiary
and associated
(138) (16) (66) (8) companies (107) (12) (119)
Sale of subsidiary
and associated
166 138 78 70 companies 128 107 107
Acquisitions and
28 122 12 62 disposals 21 95 (12)
Equity dividends
paid - Rio Tinto
(617) (539) (292) (273) shareholders (477) (417) (665)
Cash outflow before
management of liquid
resources and
(951) (532) (450) (270) financing (736) (411) (867)
Net cash flow from
management of liquid
1,032 (581) 489 (294) resources 798 (440) 211
Ordinary shares
issued (excluding
10 12 5 6 scrip dividends) 8 9 14
Loans received
(261) 1,015 (124) 514 less repaid (202) 785 705
Management of liquid
resources and
781 446 370 226 financing 604 354 930
(Decrease)/
(170) (86) (80) (44) increase in cash (132) (57) 63
Cash flow from
operating activities
Operating profit
from continuing
835 842 397 426 activities 646 651 1,211
Depreciation and
458 389 217 197 amortisation 354 301 725
Exploration and
evaluation charged
134 168 63 85 against profit 104 130 229
129 153 61 77 Provisions 100 118 148
Utilisation of
(89) (87) (42) (44) provisions (69) (67) (130)
Net change in
(147) (229) (70) (116) working capital (114) (177) (133)
16 (147) 8 (75) Other items 12 (114) (87)
Operating cash flow
from continuing
1,336 1,089 634 550 operations 1,033 842 1,963
Operating cash flow
from discontinued
- 50 - 26 operations - 39 39
Net cash flow
from operating
activities
1,336 1,139 634 576 (as above) 1,033 881 2,002
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BALANCE SHEET
First First First First First First
Half Half Half Half Half Half Year
1997 1996 1997 1996 1997 1996 1996
A$m A$m m m US$m US$m US$m
(in pounds)
Fixed assets
Property, plant
12,393 10,735 5,579 5,435 and equipment 9,283 8,446 8,960
Exploration and
evaluation
363 362 163 183 properties 272 285 293
Fixed asset
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