Rio Tinto confirms promise on Jabiluka

Rio Tinto confirms promise on Jabiluka

MSN Channel Nine News

18 April 2003

Global mining group Rio Tinto plc has confirmed it won't proceed with the Jabiluka uranium mine in Australia's Northern Territory without the consent of the region's traditional land owners.

Rio Tinto chairman Sir Robert Wilson his promise about Jabiluka to the Mirrar people would not be forgotten when he retires in October.

"This commitment doesn't disappear with my retirement," he told the company's annual shareholder meeting in London.

"The question of putting a clear commitment into legal form is, I understand, under discussion."

The Jabiluka mine is under development by Rio Tinto's 68 per cent subsidiary Energy Resources of Australia Ltd which also operates the nearby Ranger uranium mine.

The Rio Tinto board also denied it was ignoring potential court cases involving environmental damage and human health problems caused by its past activities in places ranging from the North England city of Hull to Bougainville and Papua New Guinea.

"There are a number of court cases around at any one time but the opinion of the board is that they don't represent a significant risk," finance director Guy Elliott said.

At the meeting, shareholders also queried a 22 per cent pay rise to non-executive directors.

Sir Robert defended the rise in pay for non-executive directors from STG46,000-a-year to STG56,000 ($A119,050 to $A144,925) as necessary given increasing potential for board members to be sued in the post-Enron business environment.

"The burden and demands and potential liability has risen sharply and this company has had to address the question of whether fees need to be raised appropriately," he said.

"What you're seeing here you will see reflected in other companies in years to come."

Sir Robert said the metals industry was likely to lead a global economic recovery but there was no indication when this would occur.

Strong demand out of China had pushed up iron ore prices during 2002, and was likely to drive any recovery, but a volatile foreign exchange market added further uncertainty to the near-term outlook.

"As far as the outlook is concerned, forecasts are obviously clouded by the uncertain economic and political consequences of the war in Iraq," Sir Robert said.

"Even leaving aside the war, it is difficult to see what might cause significant improvement in the main economies of the OECD (Organisation for Economic Cooperation and Development) in the near term."

Rio Tinto's key assets, such as copper, aluminium and coal, were "depressingly flat" in 2002, with iron ore and gold the only exceptions.

But despite these lacklustre markets, the company had delivered its second best earnings performance, Sir Robert said.

Rio Tinto reported a net profit of $US651 million in 2002 after $US879 million in writedowns.

This compared to a $US1.079 billion net profit in 2001 which included a $US583 million writedown.