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Print16/10/2008 - Rio Tinto Ltd, the world's second largest iron ore producer, says strike action by train drivers at its Pilbara operations in Western Australia has not impacted output.
The drivers are seeking an annual pay rise of 4.75 per cent, plus $20,000 a year for employees affected by Rio's plan to introduce driverless trains at its Pilbara operations by 2012.
"The recent rail strike has had no impact on production," Rio Tinto chief executive Tom Albanese told a conference call on Wednesday.
Meanwhile, Rio Tinto chief executive of iron, Sam Walsh, said a number of smaller steel mills in China were reviewing production amid the turmoil in financial markets and weakening steel demand.
"The fundamentals of the Chinese steel market does remain sound and we see this as a temporary adjustment," Walsh told reporters.
Rio Tinto on Wednesday said a plan to divest $US10 billion ($A14.31 billion) in assets by the end of the year was under review given the "challenging financial markets".
The company is pursuing the divestment strategy to help pay off debt associated with the $US38.1 billion ($A54.53 billion) acquisition of aluminium producer Alcan Inc.
However, Rio Tinto chief financial officer Guy Elliott there was no concerns that the company would be able to service its Alcan debt, despite the likely deferral of divestments.
The company said it was reviewing a potential cut in production at its higher cost smelting units amid the current market weakness.
Rio Tinto Alcan chief executive Dick Evans stressed that the company's highest cost smelters are still "cash flow positive" today.
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