Rio Tinto iron ore output at record high, floods hit coal

Rio Tinto iron ore output at record high, floods hit coal

Sydney: Global miner Rio Tinto posted a 6% rise in iron ore production to a record level in the fourth quarter powered by Chinese demand, but said coal production suffered from flood-related disruptions in Australia.

Australian hard coking coal production was up 8% on the fourth quarter of 2009 and rose 20% on full-year 2009, following increased investment in its Queensland operations, Rio Tinto said.

Australian thermal coal production was down 9% overall for the year, mainly due to wet weather in the Hunter Valley coal region, it said.

Declaration of force majeure at four Queensland coal mines due to flooding in December remained in place, the company said.

“All the Queensland coal mines are operational but are still constrained in some way by weather impacts, including the impact on third party infrastructure," the company said, adding it was unable to estimate the full impact of rains or the duration of the force majeure declaration.

Aluminium production by Rio Tinto, the world’s biggest producer, was broadly flat in the fourth quarter at 962,000 tonnes.

Rio Tinto’s global iron ore operations set a new quarterly production record of 65 million tonnes, 50 million tonnes of which is attributable to the company after subtracting material going to partners and an annual record of 239 million tonnes, 185 million tonnes of which goes to Rio Tinto, the company said.

Rio Tinto has earmarked $1.2 billion to increase production capacity in Australia’s Pilbara region to 283 million tonnes per a year by the fourth quarter of 2013.

Rio Tinto is the world’s second largest iron ore miner sandwiched between top producer Vale and BHP Billiton, which reports quarterly data on Thursday and also is tipped to post record output.

Spot iron ore is trading at 8-month highs on strong demand from steel mills, encouraging mining companies to dig deeper and faster for more ore.

After underperforming against other base metals in 2009, aluminium prices galloped 68% higher in 2010, helped by rising orders from aerospace and automotive manufacturers.

Rio Tinto’s mined and refined copper output were down 9% and 6% on the fourth quarter of 2009 and down 16% and 5% on full year 2009, in line with previous guidance.