Rio’s iron ore output up 43%

Rio Tinto, the global mining company, boosted production of iron ore during the second quarter, reflecting rising demand from China. The figures were announced on Wednesday as Beijing launched an anti-corruption probe centred on Rio. Rio’s iron ore division increased production to 45.1m tonnes, a 43 per cent rise compared with last quarter and an 8 per cent rise from the second quarter of 2008. In an industry experiencing a fragile recovery from the steep drop in commodities demand, Rio reported second-quarter production figures that were greeted by some analysts as an indication that the company’s first-half financial results might be better than expected. But its aluminium division, Rio Tinto Alcan, continued to reflect depressed aluminium demand. Production of 942,000 tonnes was 5 per cent lower than the second half of 2009 and one per cent lower than the first half of this year. “Markets remained tough in the second quarter, as expected, particularly in aluminium,” said Tom Albanese, chief executive. The company expects to reduce its aluminium smelting capacity by 12 per cent by the end of year, in part by closing its Anglesey smelter in Wales, a major employer in the region. “Rio Tinto second-quarter production numbers seem to be quite a bit better for their big commodities than we have expected, while the smaller businesses such as diamonds and coking coal were underperforming most,” said Tobias Werner, commodities analyst at IHS Global, in a report. Second-quarter diamond production was 72 per cent lower year on year, highlighting the troubles affecting the diamond industry. De Beers is set to report interim results later this month. Rio, which has offered little response to Chinese allegations that it bribed steelmakers to obtain industrial information, confirmed on Wednesday that it had not halted iron ore shipments to China. “It is business as usual,” a representative said. Its chief iron ore negotiator, Stern Hu, remains detained in China. source:www.ft.com