Sector movers: Rio Tinto's expansion plans lift mining stocks

28th Nov 2013 15:58

A well-received statement from London-listed diversified mining group Rio Tinto and rising metals prices gave mining sectors a boost on Thursday.Rio Tinto today announced plans to ramp up production at its iron ore business in Western Australia. The FTSE 100 group expects mine production capacity will increase by more than 60m tonnes per annum (mtpa) between 2014 and 2017 from a run base rate of 290mtpa by the end of the first half of 2014. The majority of the low-cost growth will be delivered in the next two years with mine production of more than 330m tonnes in 2015.Chief Executive Sam Walsh said: "Expanding our world-class, low-cost, high-margin Pilbara operations represents the most attractive investment opportunity in the sector and is in line with my commitment to be totally focussed on only allocating capital to opportunities that will generate the best returns to shareholders."The stock was up 4.28% at 3,273.44p before the close of trade.Investec analyst Hunter Hillcoat said that the expansion plans have been flagged in recent months and should not be a surprise to the market. However, near-term target rates are still 10-20mtpa ahead of his current estimates. Investec maintained a 'buy' rating for Rio Tinto with a target price of 3,668p. Other brokers including RBC Capital Markets and Canaccord Genuity also reiterated their positive recommendations on the stock.Fellow miner Anglo American was also being helped by broker comments after analysts at Liberum Capital upgraded their rating for the stock to 'hold'.Metals prices were also rising today with gold rising for the first time in three days as the US dollar weakened against most other currencies. Gold was up 0.47% at $1,243.70 a tonne on the COMEX, while silver gained 0.37%.Other metals producers were in positive territory today, including Fresnillo, Vedanta Resources, Glencore Xstrata, Antofagasta and BHP Billiton. Top performing sectors so far todayMining 16,395.11 +2.86%Industrial Metals & Mining 1,349.44 +1.84%Technology Hardware & Equipment 1,177.02 +1.08%Oil Equipment, Services & Distribution 23,279.29 +0.90%Chemicals 10,112.01 +0.81%Bottom performing sectors so far todayHousehold Goods & Home Construction 11,031.30 -1.57%General Retailers 2,728.67 -1.40%Tobacco 36,450.34 -0.90%Automobiles & Parts 8,891.66 -0.86%Beverages 14,473.51 -0.60%BC