December 3, 2017 / 11:17 PM / a year ago

Rio Tinto cuts capital spending forecast for 2017

FILE PHOTO: The Rio Tinto mining company's logo is photographed at their annual general meeting in Sydney, Australia, May 4, 2017. REUTERS/Jason Reed/File Photo

(Reuters) - Anglo-Australian miner Rio Tinto Ltd (RIO.AX) said on Monday it expects capital expenditure of less than $4.5 billion in 2017 down from an earlier forecast of $5 billion, as it focuses on delivering better returns to shareholders.

Rio maintained its capital spending forecast for 2018 at around $5.5 billion.

The company also said that it will deliver additional free cash flow of $1.5 billion a year from 2021, following on from its drive to boost free cash flow by $5 billion over 2017 to 2021.

“Our Group target of $1.5 billion of annual additional free cash flow from 2021 will ensure we can continue to lead the pack in delivering superior cash returns to our shareholders,” Chief Executive Jean-Sébastien Jacques told an investment seminar.

The miner added that it expects to ship 330 million to 340 million tonnes of iron ore from its Pilbara operations in 2018, slightly ahead of its forecast of 330 million tonnes for this year.

Shares of Rio Tinto rose 1.6 percent in early trade compared with a 0.1 percent gain in the benchmark index .

Reporting By Shashwat Pradhan in Bengaluru; editing by Richard Pullin

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