From the Financial Post:
...Sydney-based analyst Chris Lancaster with RBC Capital Markets says Rio’s initiatives were “articulate, positive and convincing.” He highlighted the company’s bullish view on commodity markets in 2008 and 2009, plans to invest US$2.42-billion in two new iron ore mines, approval of underground diamond mining at Daivik, an additional US$5-billion of divestments to US$15-billion, and a proposed dividend increase of 30% in 2007 and 20% in both 2008 and 2009....MORE
From the Wall Street Journal:
Rio Tinto's Value Defense
Rio Tinto has chosen the right way to defend itself. The United Kingdom mining giant has responded to the all-share offer from rival BHP Billiton, now valued at $131.12 billion, by focusing on its own value. Rio is promising investors more cash and higher production. That beats rubbishing its predator or erecting political roadblocks -- and it turns the pressure back on BHP to raise its bid.
Rio has given investors some red meat. It is raising its dividend 30%, which should fit comfortably within its operating cash flow. It also has increased its estimate of the synergies it expects from buying Alcan in July by more than 50%, promising $940 million a year in savings -- with much of that going to reduce Rio's debt pile of roughly $40 billion.
Less easy to sink one's teeth into is the promise of greater production. Rio plans to triple its iron-ore output, partly by investing $2 billion in its Western Australia complex. Selling assets will help fund such plans. Still, the results will be a long time coming, and the benefits are, in Rio's own word, "conceptual."...MORE
