Performance
Strategy
RTIO's strategy of remaining the world's best positioned supplier of iron ore is a key component of the Group's strategy of maintaining a strong position in products that underpin global economic growth. RTIO seeks to expand its business by operating its assets with an emphasis on maximising efficiency and therefore margins.
In part due to the implementation of its investment programme during the past five years, RTIO has positioned itself to expand its business while maintaining its ability to respond to changes in global demand for iron ore.
While capital expenditure has been reduced in response to the economic downturn, RTIO believes it is capable of reactivating its planned expansions in the Pilbara (beyond 220 million tonne annual capacity), and IOC in Canada (beyond 18 million tonnes of pellets and concentrate) in a short timeframe. Projects in Guinea and India can be activated in response to changes in market conditions and as the Group's capital expenditure budget permits.
In addition to its reductions in capital expenditure, RTIO has also introduced a series of initiatives to reduce its operating costs in order to enhance its flexibility. Production from the HIsmelt® ironmaking plant outside Perth was suspended for three months starting in December 2008. RTIO is reducing its level of employment and is in the process of implementing certain structural reforms to consolidate its operating units. Similarly, at Corumbá in Brazil, RTIO has reduced employment levels.
