Rio Tinto 4Q iron ore output rises despite supply glut

20th January 2015, Comments 0 comments

Rio Tinto said Tuesday iron ore production jumped 12 percent year on year in the last three months of 2014, adding to a global supply glut that has seen prices plunge and weaker demand from a slowing China.

The world's second-largest miner said output came in at 79.1 million tonnes in October-December, while global shipments of the commodity jumped 13 percent to 82.2 million tonnes.

"We have had a successful year of production, capped off with a robust fourth quarter," Rio's chief executive Sam Walsh said.

"Output is in line with our targets across all of our major products.

"In a challenging market, Rio Tinto remains focused on operating and commercial excellence to leverage our low-cost position and maximise value for shareholders."

Shares in the Anglo-Australian miner fell 1.35 percent to Aus$53.43 around in early trade Tuesday.

Analysts have said the world's largest miners, which enjoy lower costs, have been boosting output despite tumbling commodity prices in order to increase their share of the market.

The increased iron ore output was driven by a 12 percent lift in production from the Pilbara region in Western Australia to 280.6 million tonnes last year -- a new annual record, of which Rio's share was 224.9 million tonnes.

The boost was due to the early completion of an expansion project, Rio said.

Sales from the Pilbara in 2014 also reached record levels, jumping 18 percent to 288.3 million tonnes, with Rio's share at 231.5 million tonnes, as the company drew down on stocks that had been built up ahead of the infrastructure expansion.

Softening demand from China also weighed on the iron ore price, which slumped 47 percent in 2014.

China -- a key customer for Australian miners -- has been hit by a painful slowdown over the past year, with manufacturing, investment and spending all stuttering. Beijing said Tuesday economic growth in 2014 came in at its slowest pace in 24 years.

Rio also boosted its copper output year-on-year by four percent, even as the price of the metal sank to its lowest level in more than five years last week.

Meanwhile, Rio's aluminium output slipped slightly, while the production of coking coal -- which like iron ore is another key ingredient in steel-making -- dropped 31 percent from the fourth-quarter of 2013.

© 2015 AFP

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