Rio Tinto-Zinc Prospects Good

Press, Volume CIII, Issue 30442, 16 May 1964, Page 16

Rio Tinto-Zinc Prospects Good

(N.Z. Press Association—Copyright) MELBOURNE, May 15. Rio Tinto-Zinc Corporation expects another lift in group profit this financial year if the outlook for lead, zinc and copper remains strong.

The chairman of the worldwide British mining group (Mr V. Duncan), says this in the annual report released today.

Consolidated net profit for the year to December 31, already announced, moved up from £5.7 to £6.3m. Mr Duncan attributed the higher profit to substantially better results from lead and zinc operations, and the newly included profit of Atlas Steels of Canada. He says these gains were partly off-set by much lower uranium profits in Australia and Canada. According to the annual report, the biggest share of group assets —38 per cent—is in the Australian subsidiary, C.R.A., which is 90 per cent owned. Mr Duncan says his company is involved in four projects around the world, each requiring expenditure of over £3om. Australian Project Two are in Australia —the internationally-owned alumina refinery to be built at Gladstone, Queensland, and the Hammersley iron ore project with Kaiser Steel of the United States. Mr Duncan says he expects the company’s outlay on the four projects again to come mainly from retained profits, thus avoiding watering down the equity capital. Commenting on uranium prospects, Mr Duncan says the Mary Kathleen Mine, which was closed last October, is being maintained in readiness for another contract —perhaps around 1970. The group might have to lift its uranium production in the 19705, when a big expansion of nuclear power is expected in Europe and North America. On aluminium, Mr Duncan says the Australian producer Comalco may take several years to contribute significantly to group profits while it was still in the development stage.

Mr Duncan says much is being said about stabilising world metal prices, but “this is easier said than done.”

Now, with buoyant commodity prices, the danger is that consuming countries may be driven to substitutes if prices go too high.