PERTH (miningweekly.com) – Diversified miner Rio Tinto’s CEO Sam Walsh on Thursday told shareholders that the New South Wales Land and Environment Court’s decision to overturn the approval of the Mount Thorley Warkworth mine extension could mean that the future of Australian business had been compromised.

Speaking at the company’s annual general meeting, he noted that stable fiscal and regulatory frameworks provided the foundation for investing in and operating long-life, capital-intensive assets.

“With this in mind, I expect an Australian government to see it in the nation’s best interest to maintain business-friendly investment policies, thus ensuring that Australia maintains its competitive position.”

Rio had previously warned that some 1 300 jobs could be in jeopardy at the Mount Thorley Warkworth mine if the current expansion plans did not proceed.

Meanwhile, Walsh told shareholders that Rio would be focused on reducing its costs in 2013, and improving performance at all its operation, as well as delivering on approved growth projects and divesting of assets that were not core to the company’s strategy.

“We are making good progress in all of these areas, but you will appreciate there is a lot more that we need to do,” said Walsh.

The miner was targeting cost savings of some $5-billion over the next two years, which would be achieved through cost reductions and productivity improvements.

Chairperson Jac Nasser noted that the main driver of these cost-saving initiatives was to navigate the company through the current market volatility.

“Two things remain critical; first, we must maintain a strong balance sheet throughout the economic cycle, in order to ensure we have the financial strength to deliver against our project commitments, regardless of market volatility.

“Second, we must be low-cost operators. This is vitally important if we want to become an even more profitable and sustainable business over the long term.”

Walsh noted that the company was also looking at delayering the organisation to improve efficiency and accountability, as well as looking at its operating model to determine the work structure.

“In the longer term, my vision is to build a company that’s greatly admired and respected. A company that’s even more attractive to investors,” he added.