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These are huge and impressive numbers, but then the Iron Ore product group is used to talking in such mega terms. It is Rio Tinto's biggest business, accounting for a quarter of the Group's operating assets and last year contributing more than a third of its profit. It currently produces over 100 million tonnes of ore a year, more than double its output five years ago.

Two key factors lie behind this growth, Renwick explains. First, the acquisition in 2000 of North Limited, and with it Robe River Iron Associates in which Rio Tinto has a 53 per cent interest. Robe's two mines last year yielded a total of 45 million tonnes of iron ore and the West Angelas expansion will soon add another five million tonnes. North's assets have now been absorbed into Rio Tinto. In 2002, Hamersley's and Robe's rail facilities were brought together under the umbrella of Pilbara Rail and, more recently, a new company, Pilbara Iron, has been formed to bring about even closer co-operation (see article 6).

The other main reason for the rapid rise in the Iron Ore group's sales figures is the phenomenal surge in demand from China.

"When Hamersley Iron first went into China in 1973, the country was producing some 30 million tonnes of steel a year," says Renwick. "Today, it's by far the world's biggest steel producer and, very soon, annual output there will reach the 300 million tonne mark. We've been seeing year on year growth of about 20 per cent in China's iron ore demand, and, while this rate may slow, there's no sign of demand running out of steam - quite the reverse, in fact."

Today, about half of Rio Tinto's entire iron ore production is shipped to China. So, is he concerned about having so much of the production tied to the health of a single economy?

"You have to pursue the markets where they are," he maintains. "And bear in mind, too, that a similar situation prevailed when Hamersley Iron started. In those days, two thirds of our business was tied to Japan. So we were just as 'exposed' then - yet we still prospered.



These are huge and impressive numbers, but then the Iron Ore product group is used to talking in such mega terms. It is Rio Tinto's biggest business, accounting for a quarter of the Group's operating assets and last year contributing more than a third of its profit. It currently produces over 100 million tonnes of ore a year, more than double its output five years ago. Two key factors lie behind this growth, Renwick explains. First, the acquisition in 2000 of North Limited, and with it Robe River Iron Associates in which Rio Tinto has a 53 per cent interest. Robe's two mines last year yielded a total of 45 million tonnes of iron ore and the West Angelas expansion will soon add another five million tonnes. North's assets have now been absorbed into Rio Tinto. In 2002, Hamersley's and Robe's rail facilities were brought together under the umbrella of Pilbara Rail and, more recently, a new company, Pilbara Iron, has been formed to bring about even closer co-operation (see article 6). The other main reason for the rapid rise in the Iron Ore group's sales figures is the phenomenal surge in demand from China. "When Hamersley Iron first went into China in 1973, the country was producing some 30 million tonnes of steel a year," says Renwick. "Today, it's by far the world's biggest steel producer and, very soon, annual output there will reach the 300 million tonne mark. We've been seeing year on year growth of about 20 per cent in China's iron ore demand, and, while this rate may slow, there's no sign of demand running out of steam - quite the reverse, in fact." Today, about half of Rio Tinto's entire iron ore production is shipped to China. So, is he concerned about having so much of the production tied to the health of a single economy? "You have to pursue the markets where they are," he maintains. "And bear in mind, too, that a similar situation prevailed when Hamersley Iron started. In those days, two thirds of our business was tied to Japan. So we were just as 'exposed' then - yet we still prospered.
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Review is published by Rio Tinto, 6 St James' Square, London SW1Y 4LD, England Telephone +44 (0)20 7930 2399 Editor: Cherry DeGeer