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Rio Tinto profits down as commodity prices fall

11 February 10 09:43 GMT

Anglo-Australian mining company Rio Tinto has reported a pre-tax profit of $7.86bn (£5.02bn) for 2009, down 14% on the $9.18bn it made in 2008.

Despite efforts to reduce operating costs, lower commodity prices in 2009 hit overall profits, the company said.

On Wednesday, four Rio workers were indicted in China on charges of bribery and violating commercial secrets.

"We are very concerned about the nature of these charges," said Sam Walsh, chief executive of Rio Tinto Iron Ore.

'Tough market'

Prices declined for nearly all of Rio Tinto's major commodities, the company said, with average copper prices down 28% and aluminium prices 35% lower.

The company said it had made $2.6bn of cost cuts in 2009, £1bn of which came within aluminium production.

Rio Tinto chief executive Tom Albanese told the BBC that it had been a "tough market and economy" in 2009, but the company had emerged "stronger and fitter" and was able to look at further growth opportunities.

The company said it had paid its first dividend in a year. However, at 45 cents a share, it was 19% lower than last year's final dividend.

Responding to reports by the Chinese state news agency Xinhua, Mr Albanese confirmed that the case against the Rio employees would go to trial but said it would be "inappropriate" for Rio Tinto to comment further on the case.

Australian citizen Stern Hu, Rio Tinto's lead iron ore negotiator in China, and Chinese nationals Liu Caikui, Ge Minqiang and Wang Yon have been in detention since July last year.

No date has been announced for the trial, but a Chinese court official said it could begin by the end of February at the earliest.

If convicted, they could each face up to 27 years in prison.

"We continue to emphasise to the Chinese authorities the need for the case to be handled transparently and expeditiously," said a spokesman for Australian foreign minister Stephen Smith.

A month before the arrests, Rio scrapped a $19.5bn (£12.5bn) deal with China's state-owned Chinalco in favour of a tie-up with rival giant BHP Billiton, which angered some in Beijing.

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