Rio Tinto aiming for $5bn of free cash flow in productivity improvements

Rio Tinto is aiming to deliver $5bn of free cash flow via productivity improvements over five years.

At an investor conference hosted by Macquarie in Sydney, on Thursday the miner said there was scope to broaden its cost savings programme to improve upon the utilisation of its haul trucks, processing activities and reducing maintenance downtime.

The mining group also highlighted the expected profitability of its investments, including the Silvergrass iron ore project and the Amrun greenfield bauxite projects, both of which it said were progressing to plan.

It continued to work on developing its third major project, the high-grade copper development at Oyu Tolgoi.

Rio was targetting an internal rate of return in excess of 15% for those two projects and Amrun and "to deliver value through the cycle".

In its presentation the company said cash flows reached $9.58bn in 2016, with iron ore contributing the bulk of that, to the tune of $5.65bn in cash flows from operations, followed by its aluminium operations which added $2.1bn, alongside another $987m from copper and diamonds and $1.43bn from energy and minerals.