Solid first quarter production for Rio Tinto

Rio Tinto has reported a solid first quarter of 2012, with production of iron ore, coal, bauxite, alumina and titanium dioxide all rising compared with a year ago.

Releasing its operations review for the first quarter of 2012, the diversified mining company reported first quarter global iron ore shipments of 54 million tonnes, 2% higher than the first quarter of 2011.

Global iron ore production of 59 million tonnes (46 million tonnes attributable) was 10% higher than the first quarter of 2011. Production was five million tonnes above shipments as ports in Western Australia were closed during cyclonic activity.

During the quarter, iron ore production and shipping capacity in the Pilbara in Australia increased by a further five million tonnes to 230 million tonnes per annum (Mt/a), following the completion of the second debottlenecking project at the Dampier port on time and on budget.

For 2012 Rio Tinto expects to produce approximately 250 million tonnes (100 per cent basis) from its global operations in Australia and Canada, subject to weather constraints, it said.

Chief executive Tom Albanese said "We had a solid first quarter with increased production of iron ore, coal, bauxite, alumina and titanium dioxide compared with the first quarter of 2011. This was driven by a combination of our consistently high operating performance and reduced impact from severe weather than in 2011.

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

However, mined copper production was 18% lower than the first quarter of 2011 due to anticipated lower grades at Kennecott Utah Copper. In 2012, Rio Tinto share of mined and refined copper production is expected to be approximately 600,000 tonnes and 320,000 tonnes, respectively.

Bauxite and alumina production were 10% and 13% higher than the first quarter of 2011. However, aluminium was 9% lower primarily reflecting the orderly shutdown of two thirds of capacity at Alma, due to labour disruption, and the closure of Lynemouth.

In 2012, Rio Tinto Alcan's share of bauxite, alumina and aluminium production is expected to be 30.5 million tonnes, 6.9 million tonnes and 2.2 million tonnes, respectively. These numbers exclude the 13 assets that have been identified for divestment or closure, it noted.

Hard coking coal production was 5% higher than the first quarter of 2011. Rio Tinto's share of thermal coal production was 3% higher following the increase in ownership in the former Coal & Allied operations.

In 2012, Rio Tinto's share of Australian hard coking, semi soft coking and thermal coal production is expected to be 9 million tonnes, 3 million tonnes and 20 million tonnes, respectively.

Titanium dioxide feedstocks production was 14% higher than the first quarter of 2011.

On 1 February 2012, Rio Tinto announced that it would increase its stake in Richards Bay Minerals to 74% through the acquisition of BHP Billiton's 37% interest.

In March the group announced that it had begun a strategic review of its diamond business that would include exploring a range of options for potential divestment.

Rio Tinto completed its share buy-back programme in March 2012. Since February 2011, 116.9 million shares have been purchased at an average price of £37.47, for a total consideration of $7.0 billion.