Rio Tinto Q3 Global Iron Ore Production Rises 5%

Mining giant Rio Tinto Plc. RTNTF.PK, RIO, RIO.L, RTPPF.PK on Tuesday reported a modest growth in global iron ore production for the third quarter, despite volatility in markets. Unfazed by the economic uncertainties, the company confirmed its production forecast for the year.

Iron ore accounts for roughly two-thirds of the profit of Rio Tinto. The company said global iron ore production for the third quarter advanced 5 percent to 67 million tonnes.

Rio Tinto chief executive Tom Albanese said, "We have delivered another strong set of production results in the third quarter, including record quarterly Pilbara iron ore production. Copper, bauxite, alumina, and titanium dioxide production were all higher than in the same quarter of 2011.''

Rio Tinto's share of production amounted to 52.63 million tonnes, up 6 percent from last year and an increase of 8 percent from the previous quarter.

Pilbara iron ore production rose 5 percent to 62.9 million tonnes and Rio Tinto's share was 50.3 million tonnes. Production continued to exceed sales as the business prepared itself for the expansion to 283 million tonnes per annum, with a measured build-up of stocks at the mine sites.

In Pilbara marketing, quarterly sales rose 3 percent to 61 million tonnes, and year-to-date sales grew 4 percent to 170 million tonnes.

For 2012, Rio Tinto still expects to produce, on a 100 per cent basis, around 250 million tonnes from its global operations in Australia and Canada, depending on weather.

Total mined copper production climbed 21 percent to 132,000 tonnes due to higher copper grades at Escondida and Kennecott Utah Copper and increased ore delivered at Escondida.

Bauxite output increased 13 percent, driven by increased third party demand. Alumina production climbed 20 percent from the previous year to 2.7 million tonnes.

Aluminium production fell 10 percent, as ramp up to normal capacity continued following resolution of the Alma labour dispute.

Thermal coal production increased 21 percent, as Clermont continued its ramp-up and increased plant capacity at Bengalla. Hard coking coal production dropped 13 percent, due to the impact of dragline mechanical issues at Hail Creek and a major plant shutdown at Kestrel as part of the mine extension project.

Rio Tinto had said last week that it is more cautious on the outlook over the next few quarters, citing ongoing volatility in its short-term macroeconomic outlook. The company lowered estimates for Chinese GDP growth and said it expects iron ore prices to remain volatile in the near future.

Albanese added today, "As we said at our Investor Seminar last week, markets remain volatile, but our business is resilient and our operations are performing strongly, reflecting our consistent strategy of running large, long-life, cost-competitive operations."

Smaller rival Fortescue Metals Group Ltd. (FSUMF.PK, FMG.AX) earlier in the day reported a 30 percent year-over-year increase in ore shipped for the quarter ended September 30. The company also sees an increase in demand from China after the leadership change later in the year.

Rio Tinto shares closed down 1.3 percent on the ASX at A$55.12 on 2.39 million shares.