Rio Tinto's first quarter aluminum production falls nine per cent due to Quebec lockout

Rio Tinto increased production of several key commodities in the first quarter, but global aluminum output slipped by nine per cent, largely as a result of its decision to lock out employees at a smelter in Quebec.

The London-based mining giant's share of aluminum production at its own and jointly owned operations was 854,000 tonnes, down from 944,000 tonnes a year earlier and 961,000 in the fourth quarter ended Dec. 31.

Rio Tinto (NYSE:RIO) has reorganized its aluminum assets into three business groups, including its core group Rio Tinto Alcan headquartered in Montreal. The Anglo-Australian company plans to sell or close some of its non-Alcan assets.

Rio Tinto Alcan's production dropped 12 per cent to 520,000 tonnes, primarily reflecting the lock out Dec. 31 of nearly 800 unionized workers in Alma, Que., where two-thirds of smelter capacity or 290,000 tonnes was curtailed.

A circuit breaker failure at the smelter in Shawinigan, Que., late last year temporarily reduced capacity in half to 50,000 tonnes. A gradual restart began in early February and the process is to be completed in the second quarter.

Meanwhile, capacity at Rio's Pacific Aluminum business decreased five per cent to 334,000 tonnes.

Rio has announced plans to sell some of the Pacific Aluminum assets and also closed the Lynemouth aluminum smelter in the U.K. on March 29. The British smelter had 120,000 tonnes of annual capacity.

Rio Tinto Alcan expects its share of aluminum products to be 2.2 million tonnes in 2012, excluding the 13 assets identified for sales or closure.

Chief executive Tom Albanese said the company had a "solid first quarter" as improved weather helped to increase production of iron ore, coal, bauxite, alumina and titanium dioxide.

"We were therefore well positioned for the relatively strong markets in the first quarter, albeit with continued volatility as we anticipated," Albanese stated.

Global iron ore production of 59 million tonnes, or 46 million tonnes attributable to Rio Tinto, was 10 per cent higher than a year ago.

Production was five million tonnes higher than shipments because ports in Western Australia were closed during cyclones.

pellet and concentrate production at Iron Ore Company of Canada, another Rio subsidiary, increased 12 per cent to 1.7 million tonnes.

Rio Tinto's share of diamond production at its Diavik mine in the Northwest Territories increased 19 per cent to 963,000 carats. Production in Australia was up 52 per cent to 2.5 million carats.

The company is conducting a strategic review on its diamond assets with the view to divest them or move to an alternative structure, such as an IPO.

During the quarter, Rio's mined copper production fell 18 per cent due to anticipated lower grades at Kennecott Utah Copper.

Bauxite and alumina production, both used in the production of aluminum, were 10 per cent and 13 per cent higher respectively.

Hard coking coal production, used for steel making, was five per cent higher and Rio Tinto's share of thermal coal production was three per cent higher following the increase in ownership in the former Coal & Allied operations.

Titanium dioxide feedstocks production increased 14 per cent.