Rio Tinto reduces debt by USD1.5bn after buyback

Rio Tinto confirmed it bought back $1.5bn of near-term maturing debt, as hoped, in a pair of tender offers to bondholders.

Rio said a total of $141m of debt under its Dutch auction offer has been accepted for purchase and $1.36bn under its 'any and all' offer.

Rio, which last month cut its 2017 iron ore production guidance to between 330m and 340m tonnes, finished 2015 with cash and equivalents of $9.4bn and net debt of $13.8bn, down from the $14.5bn pro-forma position at the end of 2014.

Chief executive Sam Walsh, who is being replaced by the group's copper and coal chief executive Jean-Sébastien Jacques from 1 July, has set a target of cutting operating costs by a further $1bn in 2016 and another $1bn in 2017, as well as reducing capital expenditure to $4bn in 2016 and $5bn in 2017.