Mr Tom Albanese CEO of Rio Tinto said an aggressive stance by unions high labor costs and a potential downturn in world prices threaten plans for vast expansion of its key Australian iron ore operations.

Mr Albanese also said that he would lobby Canada to ensure the Anglo-Australian miner was the operator of the planned Roughrider uranium project in Saskatchewan province, despite legal hurdles, after its successful bid for uranium prospector Hathor.

Speaking to the Australian Broadcasting Corporation in an interview, Mr Albanese said that he would like to see Rio Tinto's giant operations in the Pilbara region of Western Australia reach 450 million tonnes of ore annually, double current production of 225 million tonnes.

However, Mr Albanese said that with expanding iron ore operations around the world, assumptions that the floor price would not go much below USD 120 a tonne might be valid next year but not long beyond that.

Mr Albanese told that "Our Pilbara business is designed to operate well and stay profitable in the 120 range. Again, what we have to do is we have to control cost pressure. I think the one thing I'm concerned about is that our cost pressures in the Pilbara, our cost pressures in Australia are quite a bit higher than cost pressures anywhere else in the world."

The Rio Tinto chief said that "militant type relationships with unions could reduce performance, with productivity already compounded by the ongoing need to attract people to more remote areas.”

He said that there were plans to expand production in the Pilbara and he would like to see it expand even beyond 450 million tonnes, but all the other pieces have to be in place.

The Rio Tinto chief also said he would be lobbying the Canadian government and Saskatchewan provincial government to ensure Rio Tinto was the operator of the planned Roughrider uranium project following its CAD 654 million takeover of Hathor.

(Sourced from Reuters)