Rio finds offshore easier

RIO Tinto says the ease of exploring for base and precious metals outside Australia has led it to greatly reduce its greenfield program in the country.

Rio Tinto head of exploration Eric Finlayson said the company had been reducing its greenfield exploration in Australia since the 1990s in favour of easier offshore options.

"Rio Tinto commenced a process as far back as 1994 to substantially reduce its greenfield effort in Australia in favour of explorable outcrop offshore," Mr Finlayson told delegates at the Association of Mining and Exploration Companies conference in Perth yesterday.

"Commodities like copper and a number of others are primarily explored overseas rather than Australia because exploration conditions here are hard, are difficult."

Mr Finlayson said the focus in Australia would be tailored towards bulk commodities.

"We're exploring here for the commodities that make us a lot of money here and those are the bulk commodities - iron ore, bauxite and coal," Mr Finlayson said.

"That really is the pedigree of the country as far as we're concerned.

"Here in Australia, outside of the Hammersley Basin (Western Australia), outcropping world class orebodies are getting pretty hard to find, and exploring through deep cover is not a particularly rewarding gain."

Rio Tinto spent about $200 million on global exploration in 2006.

"It is our aim as an exploration group is to add between $1 billion to $2 billion of value to Rio Tinto every year through discovery or early stage acquisition," Mr Finlayson said.

Rio Tinto managing director of development Phil Mitchell said the Pilbara would face the same congested infrastructure problems as the east coast coal industry if third-party access was granted.

"I don't think that people realise the magnitude of the cost of turning the Pilbara rail into multi-user facilities," he said.