Rio Tinto has unveiled its strategy to generate $5bn of additional cash-flow over the next five years as a part of its long-term business plan.
The strategy focuses on safety, cash generation, portfolio development, commitment to capital discipline and to deliver better shareholder returns.
The company seeks to increase its productivity throughout its $50bn portfolio of assets by emphasising on operational efficency.
It is expected to produce a total $5bn of further free-cash flow by the end of 2021, as well as the cash cost reduction target of $2bn in 2016 and 2017.
Rio Tinto chief executive J-S Jacques said: “Our strategy plays to our strengths: world-class assets, a strong balance sheet along with commercial and operating excellence.
"A relentless focus on generating cash, together with capital discipline, prioritising value over volume, means that investors can expect us to deliver superior shareholder returns whilst continuing to invest through the cycle. We have the right team and performance culture in place to deliver this strategy.
“We have placed our assets at the heart of the business to drive improved performance and ensure our resilience through the cycle. We are well on track to meet our target of $2bn of cash cost savings by the end of next year.
“We are also taking advantage of any opportunity to generate value from mine through to market. Lifting the productivity on our $50bn asset base creates a low-risk and highly attractive return. It will deliver an additional $5bn of free cash-flow over the next five years.”
In addition to enhancing the performance of its assets base, the company intends to boost growth in its business.
In the near term, this will be delivered through three growth projects, Silvergrass (iron ore in Western Australia), Amrun (bauxite in Queensland) and Oyu Tolgoi (copper and gold in Mongolia).
This investment underpins an annual average copper equivalent growth in excess of 2% between 2015 and 2025.
In longer term, exploration will remain the primary priority for the company by maintaining its successful exploration programme.
Rio Tinto has also stated its commitment to maintain appropriate balance between investment in the business and cash returns to its shareholders.