Rio Tinto to cut costs by $5 bn after posting first annual loss of $2.9 bn

Rio Tinto, the world's third-largest miner plans to cut over $5 billion in costs by the end of 2014 and sell underperforming assets after unveiling its first annual loss of $2.9 billion in 2012.

Founded in London in 1873 to mine copper near the Tinto river in Spain, Rio Tinto has not posted an annual loss since it merged its UK and Australian assets in 1995 and acquired a dual listing on the London and Australian stock exchanges.

Publishing its results on Thursday night, after the Australian market closed, the Anglo-Australian miner plans to reduce capital expenditure on approved projects to about $13 billion in 2013 and lower exploration and evaluation spending by $750 million this year.

Rio Tinto posted a higher than expected underlying earnings of $9.3 billion but recorded a bottom-line loss of $2.9 billion. The loss would have been higher but for $1.3- billion tax credit it received arising from the federal government's mining tax.

The company's bottom line was dragged down due to its massive $14.4-billion writedown on its Canadian aluminium and Mozambique coal assets, which led CEO Tom Albanese departure last month. (See: Rio Tinto CEO quits after $14-bn write-down)

Incoming chief executive Sam Walsh said that his priority is to "build more focus, discipline and accountability throughout the organisation.''