RIO Tinto has signalled copper will be the clear focus for growth outside its dominant West Australian iron ore business, unveiling a long-term plan to help fill a copper supply gap expected to grow to half of global production.

The miner has streamlined the copper business through $US1.8 billion ($2bn) of asset sales to bring down its average cost per tonne.

And while production will remain steady for the next five years, Rio has identified more than one million tonnes of potential annual growth through two new projects -- La Granja open-pit mine in Peru and the Resolution underground copper mine in Arizona.

"The world is going to need a lot more copper and it's harder to bring on, so going forward I think copper is going to be very prospective," Rio chief Sam Walsh told investors in Sydney yesterday.

Rio copper boss Jean-Sebastien Jacques revealed the approach yesterday, saying that until La Granja came on, Rio expected to grow the value of the copper business by reducing costs, but production growth would come after that.

"Between 2012 and 2025, the industry will need to add an extra two million tonnes of annual capacity just to maintain current production levels," Mr Jacques said. "But with demand predicted to increase, we predict the supply gap could actually reach nine million tonnes of annual capacity by 2025."

With annual demand currently at about 18 million tonnes per year and the world's biggest copper mine, Escondida in Chile, producing about one million tonnes, this will not be an easy gap to fill.

Having sold off its Palabora mine in South Africa and its Northparkes mine in NSW this year, Rio is pursuing a strategy of four big producing assets and the two expansion options. The four assets are Rio's Bingham Canyon mine in Utah and Oyu Tolgoi mine in Mongolia, the BHP Billiton-operated Escondida and Freeport's Grasberg in Indonesia.

Mr Jacques said talks with Mongolia on a second-stage, underground mine development at Oyu Tolgoi, which was mothballed because of disagreements with the government, were going well. "It will take some time but we will restart the underground as quickly as we can -- that's where the 80 per cent of the value is," he said.

La Granja, which has the capacity to produce 500,000 tonnes of copper per year, will have the most immediate focus, with a pre-feasibility study due to be finished in the first quarter of 2014.

"Are we excited by La Granja? Absolutely," Mr Jacques said. "We believe it's one of those very few undeveloped ore bodies you can access and it is very low cost." Mining could start as early as 2016. Resolution had the potential to produce more than 640,000 tonnes of copper a year.