Rio Tinto Limited
(ASX:RIO) chief executive Sam Walsh has told its iron ore unit to reduce operating and capital costs in the Pilbara, according to media reports.
Analysts touring Rio's Pilbara operations have reportedly been told that planning is underway to slash cash costs from $US47 a tonne in 2012 to as low as $US35.50 a tonne by 2020.
Capex savings are also planned, with Rio targeting to spend $US140 a tonne for each additional tonne of capacity as it pushes towards an annual production rate of 360 million tonnes.
Rio has cited easing local inflationary pressures including labour, contractors and services, as factors in the operating cost-reduction forecast.
Other factors include the lower dollar and technology improvements.
Rio Tinto delivered a net profit of $1.8 billion in the first half of fiscal 2013.
