Aluminium output down 6% at Rio Tinto

LONDON (ShareCast) - Rio Tinto, the world's third largest miner, has blamed a 6% drop in first quarter aluminium output on production cutbacks in response to a sharp fall in demand. slump in iron ore production versus the same time last year, although output was the same as the previous three-month period. Rio kept global iron ore guidance for 2009 at around 200 million tonnes, with a recovery in Chinese steel demand expected in the second half of 2009. Elsewhere, alumina production fell 2%, but refined copper output jumped 33% thanks to improved performance and higher concentrate grades at Kennecott Utah Copper and higher throughput at Escondida. The company faces shareholders in London later today, angry at Rio's controversial fundraising plans that could see their stakes diluted. It hopes a near-£14bn deal that involves selling shares and assets to Chinese miner Chinalco will repair its balance sheet, hit by the expensive purchase of Canadian aluminium producer Alcan two years ago. "First quarter production was in line with reduced market demand," said chief executive Tom Albanese. "We have acted swiftly where necessary to reduce costs and conserve cash." "We remain committed to delivering the Chinalco transaction and our focus is on successfully navigating the regulatory processes before putting it to a shareholder vote."