RIO TINTO SAYS IT MAY BE AMONG TOP 10 NICKEL PRODUCERS

MELBOURNE, Nov 30, 2007 (AsiaPulse via COMTEX) -- BHP | charts | news | PowerRating -- Takeover target Rio Tinto Ltd (ASX:RIO) says it could be a top 10 producer of nickel as the company continues to spruik an independent future after an unsolicited approach from BHP Billiton Ltd (ASX:BHP).

Rio Tinto chief executive Tom Albanese is on the second day of an investor roadshow in Australia to sell the company's independent growth path.

The company has already knocked back a merger proposal of three BHP Billiton shares for every Rio Tinto share, which is valued at about $US132 billion ($A149.99 billion), based on the latest stock prices.

At an investor briefing on Monday night, Rio Tinto outlined a blueprint of growth including two nickel projects - Sulawesi in Indonesia and Eagle in the United States.

The company is not currently a producer of nickel but Rio Tinto copper chief executive Bret Clayton said the group could potentially become a top ten producer of the commodity.

"In 10 years' time, Rio Tinto could rank in the top-10 nickel producers globally," Mr Clayton told the briefing.

Mr Clayton said Rio Tinto was close to approving development of the Eagle project in the US, with first production scheduled for late-2009.

"At Eagle we are also focused on six further adjacent prospects, which may give us the potential to extend the mine life beyond 30 years at its current scheduled production rate," Mr Clayton said.

In Indonesia, Mr Clayton said the company was targeting an initial operation of 46,000 tonnes per annum with production commencing by 2015.

"There is also potential to further increase that production beyond 100,000 tonnes of nickel per annum," Mr Clayton said.

Rio Tinto also showcased a portfolio of copper projects at the briefing, predicting a significant increase in consumption of the red metal.

"Demand remains strong and supply I struggling to keep pace," Mr Clayton said.

"By 2025 we estimate that the world will be consuming an additional 14 million tonnes of copper per annum, that's almost a doubling of current consumption in less than 20 years."

Rio Tinto's copper project pipeline includes stakes in La Granja in Peru, Oyu Tolgoi in Mongolia, and the Resolution and Pebble projects in the United States.

The company purchased La Granja from BHP Billiton in 2005.

"We have interests in four of the largest copper projects in the world and they're growing," Mr Clayton said.

Mr Clayton said La Granja had the potential to produce 500,000 tonnes of copper per year from 2014, while Oyu Tolgoi was capable of supporting a production rate of 440,000 tonnes per year with significant gold by-products.

He added that Resolution could possibly sustain a 500,000 tonne per year copper operation for more than 40 years, with the potential an additional 20 years of mine life.

"Previous owners have walked away from each one of these without seeing their potential," Mr Clayton said.

"We have seen this potential and we're in the process of delivering it."

(AAP)

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