Rio Tinto: First quarter operations review
Commenting on the first quarter’s production results, chief executive Tom Albanese said: “Our expansion drive continues to pay off with a record-breaking first quarter for the iron ore and aluminium product groups. Markets remain very strong and the prices of many of our products are at record highs, bearing out our view that the US slowdown will have little effect on global metal and mineral supply and demand balances.
“The integration of the Alcan acquisition is going well, and our investment assumptions for this business are already being exceeded. This year we expect to invest at record levels across the group in bringing new production onstream, so we can continue to benefit from economies undergoing rapid, metals intensive phases of development.”
Record first quarter global production of iron ore, up 16 per cent on the first quarter of 2007.
Record first quarter iron ore production of 43 million tonnes in the Pilbara, Western Australia, up 15 per cent (100 per cent basis) compared with the first quarter of 2007 as the iron ore operations deliver their rapid expansion programme.
Strong contribution from Rio Tinto Alcan in the quarter, with a significant uplift in production compared to the first quarter of 2007. Bauxite increased by 106 per cent, alumina by 236 per cent and aluminium by 386 per cent, following a good performance from the Canadian smelters.
On a proforma basis the respective increases for bauxite, alumina and aluminium were 20 per cent, ten per cent and two per cent.
Mined copper production declined by six per cent compared with the first quarter of 2007, primarily reflecting lower grades at Kennecott Utah Copper and Northparkes.
Australian thermal and coking coal production was affected by heavy rains, notably in Queensland where the coal industry generally suffered production and logistics disruption.
Uranium production was 20 per cent higher than the 2007 comparative period.
During the quarter Rio Tinto reached agreement on the first two sales under its planned programme to divest around $10 billion of assets in 2008. The sale of the Greens Creek silver, lead and zinc mine in Alaska for $750 million was announced and the sale of the Cortez gold mine in Nevada was completed for $1.695 billion.
In addition, Rio Tinto will benefit from a deferred bonus payment in the event of a significant discovery of additional reserves and resources at the Cortez gold mine and will also retain a contingent royalty interest in future production. Funds from these sales will be used to pay down part of the debt raised to finance the Alcan acquisition.
This quarterly report is published instead of any Interim Management Statement, in accordance with the requirements of rules 4.3.2 and 4.3.6 of the Disclosure and Transparency Rules.
All currency figures in this report are US dollars 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 public company, and Rio Tinto Limited, which is a public company 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.
Forward-Looking Statements
This announcement includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding Rio Tinto’s financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to Rio Tinto’s products, production forecasts and reserve and resource positions), are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Rio Tinto, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.
Such forward-looking statements are based on numerous assumptions regarding Rio Tinto’s present and future business strategies and the environment in which Rio Tinto will operate in the future. Among the important factors that could cause Rio Tinto’s actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others, levels of actual production during any period, levels of demand and market prices, the ability to produce and transport products profitably, the impact of foreign currency exchange rates on market prices and operating costs, operational problems, political uncertainty and economic conditions in relevant areas of the world, the actions of competitors, activities by governmental authorities such as changes in taxation or regulation and such other risk factors identified in Rio Tinto’s most recent Annual Report on Form 20-F filed with the United States Securities and Exchange Commission (the “SEC”) or Form 6-Ks furnished to the SEC. Forward-looking statements should, therefore, be construed in light of such risk factors and undue reliance should not be placed on forward-looking statements. These forward-looking statements speak only as of the date of this announcement. Rio Tinto expressly disclaims any obligation or undertaking (except as required by applicable law, the City Code on Takeovers and Mergers (the “Takeover Code”), the UK Listing Rules, the Disclosure and Transparency Rules of the Financial Services Authority and the Listing Rules of the Australian Securities Exchange) to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in Rio Tinto’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
Nothing in this announcement should be interpreted to mean that future earnings per share of Rio Tinto plc or Rio Tinto Limited will necessarily match or exceed its historical published earnings per share.
Subject to the requirements of the Takeover Code, none of Rio Tinto, any of its officers or any person named in this announcement with their consent or any person involved in the preparation of this announcement makes any representation or warranty (either express or implied) or gives any assurance that the implied values, anticipated results, performance or achievements expressed or implied in forward-looking statements contained in this announcement will be achieved.
Further information:
For further information, please contact:
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Dave Skinner
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Simon Ellinor
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Email: questions@riotinto.com
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