RIO TINTO GROUP

Rio Tinto Group



Rio Tinto Group

Introduction

The Rio Tinto Group operates as a British Australian International metal and mining corporation. It's headquarter is located in London, UK and the office that manages its operations is located in Melbourne, Australia. The company began its operations in 1873. This mine compound was purchased by a group of investors from Spanish government located at the Rio River in Spain. The corporation has under gone a list of acquisition and expansionary operations from the time it has initiated its operations. This corporation is today considered a leading group in process of producing variety of commodities like aluminium, iron, copper, coal, diamond and uranium. The company's mainly focus upon extracting minerals; however, it is also engaged in the process of refining iron, bauxite. The corporation has successfully established its name and operations in six continents of the world. The value of its assets is estimated to be $81 billion inclusive of subsidiaries. The company has listed itself in both London stock exchange and Australian Securities exchange. It is considered as the fourth largest mining company whose market capitalization is worth $134 billion and achieved a rank of 153 among global 500 rankings in Fortune Magazine of 2012 in terms of revenues (CNN Money, 2012, pp. 1).

The corporation has earned revenues of worth $50.967 billion in 2012, the operating income is recorded to be $1.153 billion and profit is recorded as 3.004 billion in 2012. The corporation has employed 67,930 employees as per 2011 records. More recently the corporation has bought a major stock of Riversdale Mining in 2011. The company has formed a new company in collaboration with Chinalco for exploring copper resources. Rio Tinto owns 49% of the company and remained is owned by the Chinese company. The company has successfully met its target of $750 reduction in expenditure upon exploration and evaluation in 2013 and also controlled its spending by reducing $483 million in 2012. The company has made firm goals in delivering its desired and potential projects on time in terms of growth in 2013 (Rio Tinto, 2013, pp. 1).

Discussion

Macro environmental Trend

The macro environment of Rio Tinto can be analyzed and assessed by using PESTEL technique. The external factors that may have a significant impact on company's operations are described below:

Economic Factor

The economic factors like pricing, interest rates, exchange rates financial markets have a significant impact on the operations of the company. One of the most recurring threats in this regard is the price level of commodities. The company was impacted by volatile macro economic conditions as the prices of various products offered by Rio fluctuated and remained lower than the previous year in 2012. The recent debt crises witnessed by European countries also led to decreasing growth of the company. In addition, the Chinese market also slowed down due to economic recessions. However, company managed to offset the impact of price fluctuations by recovery from china and OECD countries. The macro economic conditions of many regions remained volatile and impacted ...