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SYDNEY - Higher costs in Western Australia will continue to pressure Rio Tinto's profit margins, the mining giant's chief has admitted.
The company released its first half results last week, disappointing the market.
Chief executive officer Tom Albanese said yesterday higher costs in Western Australia were a significant factor.
"We're finding a range of cost pressures in the Pilbara," he told Sky television. "In the Pilbara and all of Western Australia they're enjoying some real boom times and I think we should anticipate for the next several years that the markets and construction will be quite pressurised."
The Rio Tinto boss nominated labour and materials as being significantly more expensive.
"We've had an increase in what I would call the underlying costs, above inflation, above energy ... of roughly A$240 million, and certainly this is something I want to improve on."
Albanese also reiterated his bullish outlook for China and uranium, saying this year promised to be "exceptional" for China.
"I very much like the uranium business and we are certainly investing in growing it. In fact, we've flagged opportunities to potentially double it over the next decade."
Rio Tinto's net profit slipped by 14 per cent to US$3.253 billion ($4.28 billion) in the first six months of this year.
- AAP
