SYDNEY -（Dow Jones）- Hard coking coal production by Rio Tinto PLC （RIO） fell 6% in the fourth quarter of 2010 to 2.3 million metric tons from 2.4 million tons the previous quarter as record rainfall in the Bowen Basin in Australia's Queensland state hit output, the company said Tuesday.
But its share of iron ore output rose 6% on the year to 50.1 million tons in the fourth quarter from 47.2 million tons in 2009, the world's second-largest iron ore producer said in a full-year production report.
Rio Tinto has been aiming to consolidate its position as a world leader in steelmaking materials over the past year, as record commodity prices have helped it retire debt which hobbled it in the aftermath of the global financial crisis.
Iron ore, copper, gold, silver, platinum and tin all hit long-term price records in 2010 as demand recovered from the post-financial crisis slump.
The miner is planning a 50% increase in its production capacity from Australia's iron-rich Pilbara region by 2013, and this year also signed an agreement with Aluminum Corp. of China Ltd., or Chinalco, to exploit the Simandou iron ore project in Guinea, which is estimated to be capable of producing 70 million tons of iron ore a year.
Before Christmas, the miner announced a A$3.9 billion offer for Riversdale Mining Ltd., which aims to mine a 13 billion ton coal resource in Mozambique for the hard coking coal used in blast furnaces.
Chief Executive Tom Albanese said the company's performance could be measured by its quarterly and annual production records for iron ore in the fourth quarter and 2010 as a whole.
"Running our operations at full capacity was a priority for Rio Tinto in 2010, in an environment of strong prices for most of our commodities," he said.
Paul Young, a mining analyst at Deutsche Bank in Sydney, said that the results ratified Rio's decision to focus on upgrading its iron ore output. "The planets were well-aligned for Rio's iron ore production in the fourth quarter," he said.
The miner plans to raise its annual output of Pilbara iron ore to 283 million tons by the end of 2013 from 184.6 million tons in 2010, with a further expansion to 333 million tons in 2015 currently undergoing feasibility studies.
Expansions to its Pilbara iron ore joint ventures worth US$7.2 billion were approved during the year, with Rio Tinto's share of the spending around US$5.3 billion.
However, adverse weather over the Australian wet season threatens some of the major producing regions for the world's number-three listed miner. Above-average cyclone activity is expected in the Pilbara over the next few months and Rio Tinto's Boyne aluminum smelter and four Bowen Basin mines have declared force majeure in recent weeks because of rainfall and flooding in Queensland.
The Bowen Basin produces nearly two-thirds of the world's hard coking coal, an essential ingredient in steelmaking, and some analysts predict prices of the commodity to double to as high as US$500/ton as a result of the supply disruption from the rainfall.
Rio Tinto, the first of the Bowen Basin's major miners to announce its production for the last months of 2010, declared force majeure on its local mines Dec. 29 and said Tuesday that while "limited operations" were underway it was unable to provide an estimate of the impact of the weather or the duration of the force majeure declaration.
Hayden Bairstow, an analyst at CLSA in Sydney, said that output was nonetheless much as expected.
"Iron ore production records will be pretty much par for the course over the next few years and, to be honest, I could have seen the coal numbers even lower given the weather they've been having in Queensland," he said.
Rio Tinto said hard coking coal production for the full year increased by 20% to 9.0 million tons from 7.5 million tons in 2009, short of a predicted 9.5 million ton figure in the company's October operations review.
Iron ore production of 184.6 million tons was well ahead of guidance at 179 million tons, and rose 9% on year.
Rio Tinto is the world's second-biggest producer of aluminum and iron ore, the biggest producer of uranium and a top-five producer of coking coal and copper.
Fourth-quarter mined copper production fell 9% on year to 185,200 tons from 203,300 in spite of booming prices for the commodity, with full-year production down 16% to 679,100 tons from 804,700 tons in 2009.
Rio Tinto has respective stakes in Chile's Escondida and Indonesia's Grasberg copper mines, the world's two largest, of 30% and 40% respectively. The company said ore grades had declined at both mines over the course of the year, hitting output and pushing Escondida's production down 11%.
Aluminum production was flat on the year at 962 million tons against 957 million tons in the fourth quarter of 2009, and alumina was also flat at 2.3 million tons in the fourth quarter. Alumina is an intermediate commodity in the production of aluminum from bauxite ore.
The company said that full year earnings before interest, tax, depreciation and amortisation would be trimmed by US$117 million as a result of electricity purchases caused by low rainfall in Quebec, where Rio Tinto's aluminum smelters normally depend on low-cost hydroelectric power, but underlying earnings would benefit by US$180 million as a result of higher prices for the company's provisional copper sales.
Uranium production from Rio Tinto's Ranger and Rossing mines, the world's second- and third-largest, dropped 3% to 3.3 million pounds from 3.4 million pounds in the fourth quarter of 2009 and fell 20% in 2010 to 11.4 million pounds from 14.1 million pounds in 2009.
豫公网安备41010502003434号