Rio Tinto posts solid third-quarter production

15th October 2013, Comments 0 comments

Rio Tinto reported solid third-quarter production across its commodities Tuesday, with strong growth in energy coal and copper and record output at its flagship Australian iron ore operations.

The Anglo-Australian mining titan said productivity improvements and expanded capacity at several of its sites had boosted performance across the board.

It said iron ore production rose two percent year-on-year, copper jumped 23 percent and energy coal burned to produce power was ahead 14 percent.

The iron ore result was driven by a record 64.3 million tonne performance at the firm's Pilbara operations.

"We achieved strong production results in the third quarter," said Rio chief Sam Walsh.

"Productivity improvements in our Australian operations led to record quarterly thermal coal production.

"In iron ore, we achieved record production and shipments in Western Australia following the official opening of our landmark Pilbara 290 port and rail expansion."

Going against the grain, steelmaking coal output was six percent lower than the same period last year after a wall collapse at Rio's Hail Creek mine in Queensland.

In August, Rio announced net profit slumped 71 percent to US$1.72 billion in the six months to June owing to softer commodity prices and slowing demand from key market China, prompting a cost-cutting drive.

Walsh, who formally replaced Tom Albanese at the helm in February after Rio posted its first annual loss in 18 years, said they had made steady inroads on their targets.

"We maintained good progress against our strategic priorities to improve the performance of our businesses, strengthen the balance sheet and deliver our approved growth projects," he said.

"We are also making further important gains in productivity across our operations and continue to drive costs out of the business."

Rio's shares spiked 2.5 percent on the figures, which analysts described as commendable given the tough conditions.

"It has been a year of transition at Rio and the market has, on aggregate, been sceptical -- a new CEO, huge exposure to the iron ore price, Chinese growth in question," said Peter Esho, market analyst from Invast Australia.

"But sometimes you need to sit back and congratulate a company for delivering a very good set of numbers, and in light of the circumstances, the third quarter trading update is exactly that -- a good set of numbers."

Esho said the strong production numbers, particularly in iron ore, boded well for Rio's annual profit results as prices stabilised.

Rio maintained previous annual production guidance of 265 million tonnes for iron ore and eight million tonnes for steelmaking coal.

© 2013 AFP

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