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Unlike BHP, Rio Tinto to Pick and Choose Projects

Rio Tinto (LSE:RIO) is taking a different route than arch rival BHP Billiton (ASX:BHP).The mining conglomerate is keen on “cherry-picking” t...

|Nov 30|magazine4 min read

Rio Tinto (LSE:RIO) is taking a different route than arch rival BHP Billiton (ASX:BHP).

The mining conglomerate is keen on “cherry-picking” the brightest projects and companies the market has to offer. According to  Rio Tinto CEO Sam Walsh, it doesn’t even matter what they’re digging up.

“I am about the best projects—in the best segments, certainly—but am not restricting” the company to certain commodities, said Walsh.

The move is quite different than the strategy of BHP Billiton. The company announced earlier this year it would spin off its production of materials such as aluminium and nickel to focus on its four pillars of business – iron ore, coal, copper, and oil and gas.

“Complexity is compounded when you have too many products,” said Andrew Mackenzie, chief executive of BHP Billiton.

With over a dozen projects in a variety of commodities around the world, Rio Tinto is all about the biggest and most profitable projects. Similar to BHP, Rio is interested in expanding its copper business, which includes expansion initiatives its La Granja project in Peru and Resolution project in the U.S.

 “I am a believer that you need a portfolio approach to your business,” Walsh said. “That different projects bring different value to the equation for different reasons.”

“Copper is going to be very prospective going forward.”