DBRS Releases Report on Rio Tinto plc & Rio Tinto Limited

DBRS has today released a report on Rio Tinto plc, Rio Tinto Limited and related subsidiaries (collectively, Rio Tinto, the Group or the Companies) that provides support to the recent confirmation of the Group’s ratings at A (low) and R-1 (low) with Stable trends.

The confirmation reflects the Group’s solid business profile as a large, cost-competitive and diversified mining company with strong credit metrics.

DBRS expects Rio Tinto’s earnings for 2013 to be lower than 2012 on the basis of flat-to-lower average commodity prices, the negative impact of cost inflation, higher resource tax levels and despite the Group’s recently announced cost reduction program. Uncertainty from the European debt crisis and troubled growth prospects in the United States and China cloud the outlook for commodity prices and the Group’s near-term earnings. Completion and ramp-up of a number of new projects, including iron ore, alumina and copper operations, can be expected to increase the Group’s earning power in the near and longer term providing the potential for positive rating action.

In the interim, Rio Tinto will have to be judicious in its spending to manage the expected deterioration of its financial metrics in 2013 given the significant uncertainty in the economic outlook and an expected ongoing high level of expansion expenditures.

Notes:
Today’s report and the December 20, 2012, press release are available at www.dbrs.com or by contacting us at info@dbrs.com.