Rio Tinto Up on Transformation News

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Shares of mining major, Rio Tinto (LSE:RIO) have been up this afternoon in fairly light trading following its announcement of its next step in the transformation of its operational structure. Although its shares were in decline for most of the day, hitting a low of 3,189 in early trading, most of the day has been a relatively strong comeback.

Currently (3:41 pm UCT), RIO shares are hovering slightly above to slightly below yesterday’s close of 3,191.00. By “slightly” I mean generally less that one-tenth of one percent, although there ¬†are some signs of wobbling as this story is being published. RIO’s share price is currently at 3,184.50, down 1.4%, a fall back from 3,192.50 which was reached at about 2:30 pm.

RIO shares have been making a relatively strong comeback since reaching a 52-week low of 2,616 on 15 December. At its current price, the stock has regained more than 50% of the ground necessary to return to it’ 52-week high of 3,530.

The latest restructuring step includes the departure of former Energy division CEO, Harry Kenyon-Slaney and the “streamlining of its product groups and corporate functions¬†as part of the continued focus on efficiency and costs.”

The realignment will leave RIO with four major product groupings:

  • Aluminum
  • Copper and Coal
  • Diamonds and Minerals
  • Iron Ore

Uranium will be moved under the Diamonds and Minerals umbrella. The Energy division will no longer exist.

CEO Sam Walsh said “These changes are part of our continuing business transformation to reduce costs, simplify and strengthen our company and deliver sustainable value for shareholders. Our coal and uranium assets remain a part of our world-class portfolio. We will work hard to ensure there is a smooth transition for our colleagues in the Energy product group and continue to maximise efficiencies in our coal and uranium operations.

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