Rio investors look for lower gearing

Rio Tinto has kept chipping away at its debt this year from the $38.7bn it recorded at the end of 2008, writes William MacNamara . But on Thursday , when the mining group announces half-year results, investors will be looking for reassurance that healthier gearing can be achieved by the year-end, following its $15.2bn rights issue. The outlook for its iron ore business is all-important, since it is Rio's most valuable commodity at a time of unprecedented commercial tension with its iron ore customers in China. Like BHP Billiton, Rio has rare insights into the health of commodity markets globally. Could a recovery in aluminium demand lift Rio's earnings by year-end? Meanwhile, the dead weight of the aluminium division will contribute to a fall in earnings. Consensus earnings before interest, taxation, depreciation and amortisation are $7.69bn, down from $11.4bn in the first half of 2008. Earnings per share are forecast at $1.86 per share ($3.51).