In an investor seminar in London on Friday night, Rio chief executive Tom Albanese said the major miner had reduced its net debt position by 42% from the start of the year down to $US22.3 billion.

With its debt now under control, the company would get back on the growth track in 2010 and increase capital expenditure to at least $US5 billion, with another $1 billion up its sleeve for any particularly appealing projects.

The company previously said it expected to spend around $2.5 billion.

Albanese said the company was also focused on strengthening its relationship with China in 2010.

Relations between Rio and China, its largest commodity customer, have been strained since Rio called off an investment deal with Chinalco in favour of a joint venture with BHP Billiton and a $US15.2 billion equity raising.

“I continue to believe there are opportunities for cooperation between our two organisations,” Albanese said of Chinalco, which maintained its major stake in Rio by participating in the raising earlier this year.

Also straining the relationship was the arrest of four Rio Tinto iron ore employees in China. One of the employees, Stern Hu, was an Australian citizen.

The men have been accused of espionage but remain detained in China without charges being laid.

Albanese said he was personally working on rebuilding the company’s relationship with China and was in the country last week.

On the macro-economic front, Albanese, like many of his colleagues in the mining industry, such as BHP Billiton’s Marius Kloppers, was optimistic but warned against short-term volatility.

“With industrialised output now returning to more usual levels, we’re seeing a further improvement in consumption which we would expect to continue in 2010,” he said.

However, he also warned there might not be a return to traditional trends and fiscal deficits would need to be repaid.

Growth would continue to be driven mainly from China amid a lacklustre global economy.

At Rio’s coal operations in central Queensland, the diversified miner will be continuing development of the Clermont open cut mine and the Kestrel mine expansion project.

The KME project aims to lift production to 5.7 million tonnes per annum from 2012, extend the mine life to 2031, increase the longwall face width to 375m and create up to 250 jobs in the construction process.

Shares in Rio have fallen 1.7% to $A62.72 in trading so far today.