Rio Tinto recovering from weather effects

14th Jul 2011 08:03

The weather gods smiled more kindly on mining giant Rio Tinto in the second quarter though the company still suffered some port and rail constraints.In its second quarter operations update the company said global iron ore production attributable to Rio rose 12% from a year earlier and 17% from the preceding quarter to 48.9m tonnes, a little below some brokers' forecasts.In 2011, Rio Tinto expects to produce in excess of 240m tonnes (on a 100% basis, i.e. including its partners' share) from its global operations in Australia and Canada.Iron ore shipments in the first half of 2011 of 110m tonnes (on a 100% basis) from the Australian and Canadian operations were down 6m tonnes on the corresponding period of 2010 because of adverse weather conditions, most of which hit the group in the first quarter.Mined copper was down 24% on the second quarter of 2010, primarily reflecting lower grades at Escondida and Kennecott Utah Copper. Rio Tinto's share of mined and refined copper production is expected to be 539,000 tonnes and 350,000 tonnes, respectively, in 2011.Bauxite and alumina production improved by 8% and 6%, respectively, on the rain-affected first quarter as the Queensland operations recovered. Bauxite production was up 11% year-on-year (yoy) while alumina and aluminium production were flat.The Queensland coal mines steadily recovered from the severe rains of the first quarter, with Hail Creek the last Rio Tinto mine to lift force majeure on 12 May.Australian hard coking coal production was 9% higher than the first quarter but was down 26 per cent on the second quarter of 2010 due to the heavy rains, while Australian thermal coal production was up 18% quarter-on-quarter and up 5% yoy. In 2011, Rio Tinto's share of Australian hard coking, semi soft coking and thermal coal production is expected to be 8m tonnes, 3m tonnes and 18m tonnes, respectively."Operations largely recovered from the severe weather impacts earlier this year, although some port and rail constraints remained," Rio's chief executive, Tom Albanese said. "This quarter was also characterised by continued strong prices for most of our metals and minerals, but with worsening adverse exchange rates and some input cost pressures. Our growth programme was boosted by the successful $4bn acquisition of Riversdale, giving us further options to develop our tier one assets," Albanese added.In early trading on Thursday (14/7/11), shares of Rio were down 27p at 4,414p.--jh