Rio Tinto: Third quarter 2009 operations review
Chief executive Tom Albanese said: “We are seeing early signs of a recovery in some of our key markets, although we remain cautious about the near term outlook. Our businesses continue to operate efficiently: iron ore production set a new quarterly record, with shipments to China maintained at a high level. We also benefited from higher third quarter production at all of our copper operations compared with last year. Cost reductions continue apace and we have made considerable progress on divestments this quarter enabling us to further reduce net debt.”
Rio Tinto’s global iron ore production set a new quarterly record and was up 12 per cent compared with the third quarter of 2008.
Pilbara iron ore production of 57 million tonnes (46 million tonnes on an attributable basis), up 18 per cent on the third quarter of 2008, reflected strong iron ore markets with the mines consistently operating at above nameplate capacity rates.
Continued production cutbacks occurred in the Aluminium group in response to the sharp fall in demand. Bauxite production was down 16 per cent and aluminium down four per cent, compared with the third quarter of 2008. Alumina production increased marginally.
Mined copper production up 24 per cent on the third quarter of 2008 with higher production at all operations, in particular at Kennecott Utah Copper and Grasberg.
Refined copper production up 46 per cent on the third quarter of 2008 from improved performance and higher concentrate grades at Kennecott Utah Copper and higher cathode production at Escondida.
On 6 October 2009 Rio Tinto signed an Investment Agreement with the Government of Mongolia for the development of the Oyu Tolgoi copper-gold complex. On 13 October 2009 Rio Tinto confirmed it has given notice to complete the second tranche of its investment in Ivanhoe Mines Ltd, which will increase its holding from 9.9 per cent to 19.7 per cent. Tranche 2 consists of 46.3 million shares at a subscription price of US$8.38, for a total consideration of US$388 million.
Australian hard coking coal was down five per cent on the third quarter of 2008. Australian thermal coal production was up 12 per cent on the same period.
During 2009 Rio Tinto has announced asset sales totalling $4.1 billion. In addition, a binding offer was received from Amcor in August 2009 for $2.025 billion for Alcan Packaging global pharmaceuticals, global tobacco, food Europe and food Asia divisions.
The $14.8 billion net proceeds from the rights issues were received in July and were used to pay down Group debt. Divestments totalling $1.5 billion (before tax and fees) were completed during the third quarter and in the first week of October.
All currency figures in this report are US dollars, and comments refer to Rio Tinto’s share of production, unless otherwise stated.
About Rio Tinto
Rio Tinto is a leading international mining group headquartered in the UK, combining Rio Tinto plc, a London and NYSE listed company, and Rio Tinto Limited, which is listed on the Australian Securities Exchange.
Rio Tinto’s business is finding, mining, and processing mineral resources. Major products are aluminium, copper, diamonds, energy (coal and uranium), gold, industrial minerals (borax, titanium dioxide, salt, talc) and iron ore. Activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe and southern Africa.
Contacts:
Media Relations London
Christina Mills
Office: +44 (0) 20 7781 1154
Mobile: +44 (0) 7825 275 605
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