Mining giant Rio Tinto increased production of key commodities including iron ore and coal in the March quarter but copper output fell by 18 per cent due to lower grades at its US operations.
Chief executive Tom Albanese said the mining giant had a solid three months to March 31 with increased production of iron ore, coal, bauxite, alumina and titanium dioxide because weather was better than in 2011 and operating performance was consistently high.
“We were therefore well positioned for the relatively strong markets in the first quarter, albeit with continued volatility as we anticipated,” Mr Albanese said in a statement.
Rio Tinto said first quarter global iron ore shipments of 54 million tonnes (Mt) were up two per cent compared to the same period in 2011.
Production was 5Mt above shipments as ports in Western Australia were closed during cyclones, the miner said.
Its multi-billion dollar expansion of iron ore production and export capacity in the state’s Pilbara region continues, rising by about 5Mt to 230Mt during the March quarter.
Capacity will be increased to 283 million tonnes per annum (Mtpa) towards the end of 2013, then 353Mtpa by the first half of 2015, but the latter plan is in the final study phase.
Rio Tinto said wet weather during the March quarter significantly hampered production across its New South Wales and Queensland coal mines, and further impacts were expected from delays in removing overburden or waste material.
Compared to the December quarter, hard coking coal production was down 35 per cent, semi-soft coking coal was down 19 per cent and thermal coal was seven per cent lower.
Against the March quarter of 2011, however, hard coking coal was up five per cent while thermal coal was three per cent higher because of increased ownership in Coal and Allied.
“All New South Wales sites were impacted by the knock-on effect of reduced explosives supplies in the fourth quarter of 2011,” the miner said.
Rio Tinto’s total mined copper production was down 18 per cent on the first quarter of 2011 because of lower grades at Kennecott Utah Copper, as anticipated.
Rio Tinto said lower grades had also affected its huge, 40 per cent held Grasberg copper and gold mine in Indonesia, although it made no mention of recent strikes by workers.
The mine’s operator Freeport is expected to release first quarter data on Thursday.
“Based on the latest available Freeport estimates, 2012 production from Grasberg is not expected to reach the amount set in the metal sharing agreement because of planned mine sequencing in areas with lower metal grades,” Rio Tinto said.
“Accordingly, Rio Tinto’s share of joint venture production is expected to be zero for the year 2012.”
The mining giant’s total capital expenditure for 2012 is expected to be $US16 billion ($A15.50 billion).
“Further project approvals, mainly in the Pilbara, are likely to increase this level of investment as the growth program continues,” Rio Tinto said.
Shares in Rio Tinto were down 57 cents, or 0.87 per cent, at $64.62 at 1552 AEST, outstripping losses in the broader market.
