Teck

Denver — After spending US$4 billion on acquisitions, Rio Tinto (RTP-N) saw its profits jump 18% in 2000.

The London-based mining house posted net earnings of US$1.5 billion (or $1.10 per share), compared with US$1.28 billion (94 per share) in 1999.

Operating cash flow jumped to US$3.4 billion, up from US$400 million in 1999.

Acquisitions included the 27.6% stake in aluminum subsidiary Comalco that it did not already own. The A$1.5-billion transaction was completed in July.

At the beginning of the fourth quarter, the company completed the US$1.7-billion takeover of Australia’s North Ltd., which included a 56.1% stake in Montreal-based Iron Ore Co. of Canada (IOC). Rio Tinto is looking to increase that stake by offering to buy the 18.9% stake in IOC held by the Labrador Iron Ore Royalty Income Fund (LIF.UN-T).

The offer is still pending, though the fund has commissioned CIBC World Markets to prepare a compulsory evaluation. In the meantime, the fund has Scotia Capital scouting for other potential buyers.

Rio Tinto then purchased Ashton Mining, increasing its ownership of the Argyle diamond mine in Western Australia to nearly 100%, as well as picking up significant exploration potential in the Buffalo Hills project in Canada, through Ashton Mining of Canada (ACA-I).

Finally, in late December, the company forked over US$575 million for Coal & Allied, the Australian subsidiary of Peabody Coal.

For the year, Rio Tinto saw iron ore production jump 40% as a result of the North deal; copper production increased 4%; coal production tailed off 5%; and gold production was down 9% to 2.7 million oz.

Revenue in 2000 was just short of US$10 billion, up 7% from 1999.

The outlook for 2001 looks good, with coal production expected to grow as a result of the Coal & Allied acquisition. Copper production should rise as a result of increased grades at the Bingham operation in Utah, as well as full-year contributions from the Northparkes mine in Australia and the Alumbrera mine in Argentina.

Underground development at the Palabora copper mine in South Africa is on track for full production in 2003, while construction has begun at the $1.3-billion Diavik diamond mine in the Northwest Territories. Initial production is expected in early 2003.

The company is also eyeing expansion at the giant Escondida copper mine in Chile and the Yandicoogina iron mine in Western Australia.