Rio Tinto to increase outsourced procurement

17 December 2008
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17 December 2008 | Jake Kanter

Anglo-Australian mining group Rio Tinto is planning a "rapid acceleration" of its procurement outsourcing to help save $5 billion (£3.3 billion) by the end of 2010.

The company has agreed to offshore some of its purchasing operations to Indian BPO provider Infosys in a deal that will start at the end of this month. Rio will also outsource its IT help desk and some of its IT systems.

About 350 employees are expected to lose their jobs as a result of the projects.

A spokesman for the company added that the process of outsourcing more of its procurement and IT would continue in 2009. He would not confirm the value of the contracts or how they would be managed.

Rio said it wanted to save $2.5 billion (£1.6 billion) a year in both 2009 and 2010 to help reduce its debt by $10 billion (£6.4 billion), and manage the "unprecedented severity" of the economic downturn.

Tom Albanese, chief executive of Rio Tinto, said: "We will minimise our operating and capital costs to appropriately low levels until we see credible and meaningful signs of a recovery in our markets."



SMdec2008

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