Rio Tinto says low costs help in crunch

*CEO Albanese says Rio does better than peers in tough times *No industrial sectors immune to financial crisis *Rio still targeting $10 billion of disposals in 2008 *BHP offer for Rio-Albanese not close to fair value *Sees China GDP growth slowing to 8 to 9 percent in 2009 *Encouraged by dialogue with Guinea on iron ore project By Alister Doyle BARCELONA, Oct 6 (Reuters) - Rio Tinto Ltd/Plc is better placed than some mining firms to ride out the credit crisis and still firmly opposes BHP Billiton's $88.5 billion takeover bid, chief executive Tom Albanese said on Monday. Albanese told Reuters that Rio Tinto, the number two miner behind BHP, was helped by low-cost operations and links to China, where growth is slowing but is still far stronger than in western nations. "Rio Tinto with low-cost operations focused on the Chinese markets, which to some extent...are somewhat insulated from the global financial system, is less exposed than others at this time," he said on the sidelines of an environmental congress. "We have some of the lowest cost iron ore mines in the world, some of the lowest cost copper mines, some of the lowest cost aluminium production in the world," he said. "On a comparison with our peers basis, we actually generally do better on total shareholder return during difficult times than during buoyant times," he said. He reiterated hostility to the all-share takeover bid by BHP. "It doesn't come close to valuing Rio Tinto. Rio Tinto's businesses are quite robust," he said. He said he was pleased that the United States had worked out a financial bailout package. Greater stability "would improve the economic prospects of the mining sector and a whole range of other sectors," he said. "The focus right now is on the banking sector, as it should be, but there are no industries that would be immune," he said. He also expressed confidence Rio would reach a goal of $10 billion of disposals of assets this year to help pay $40 billion in debt to finance its purchase of aluminium maker Alcan. SALES GOING AHEAD "We continue to work within each of our disposal programmes. We continue to target $10 billion of announced transactions in 2008," he said. He declined to discuss possible prices of units that might be sold, such as Alcan Packaging or coal unit Energy America. Asked if it might be harder to sell at a good price because of market turmoil, he said that prices Rio got for past sales totalling $3 billion were "in excess of what people would have expected". "Rio Tinto is in a strong cash generative mode right now, in the first half we were generating about $1.5 billion per month in cash flow from operations," he added. He also said that Rio was closely tracking China's economic performance, a main driver of demand for coal or steel and other commodities. "We believe there will be some rebound in the fourth quarter in terms of Chinese industrial production" after the Beijing summer Olympics. "We'll be watching indicators in the coming weeks quite closely." He said that China's economic growth was likely to slow from around 12 percent in 2007. "We believe it could be maintained in the area of 8 percent going into 2009 and we'd hope to see something closer to 9 percent," he said. "That GDP growth will ultimately drive sector by sector performance, including the steel sector," he said. He said Rio was "encouraged" by talks with Guinea on the $6 billion Simandou iron ore project since Prime Minister Ahmed Tidiane Soare said last month that Rio had not met all commitments.