Rio Tinto: First quarter 2010 operations review

Chief executive Tom Albanese said: “In the first quarter, most of our operations continued to run at capacity. Chinese demand grew strongly and we saw some recovery in OECD markets, but we are still cautious about short term volatility.”

“The long term outlook remains very strong and we are now ramping up our growth projects with sustained investment in our iron ore business and the start of development of Oyu Tolgoi.”

. Rio Tinto’s global iron ore production was up 39 per cent compared with the first quarter of 2009, when heavy rains disrupted operations. Pilbara iron ore production was 53 million tonnes (41 million tonnes on an attributable basis), up 48 per cent on the first quarter of 2009.
. The Pilbara system continued to operate at or close to its nameplate capacity during the quarter with production for the 12 months to 31 March 2010 totalling 219 million tonnes.
. On 9 April 2010, Rio Tinto announced that it is currently negotiating contracts with its customers to supply iron ore priced on a quarterly basis.
. Mined copper production was down 16 per cent on the first quarter of 2009 primarily due to lower grades at Kennecott Utah Copper and Grasberg.
. Mined gold and molybdenum production were 12 per cent and 58 per cent higher than the first quarter of 2009, mainly attributable to higher grades at Kennecott Utah Copper.
. Bauxite production increased 18 per cent on the first quarter of 2009 in line with improving market demand. Production levels were maintained for alumina and aluminium.
. Australian hard coking coal production was up 35 per cent on the first quarter of 2009. Australian thermal coal production was down eight per cent on the same period.
. Uranium production was down 20 per cent on the first quarter of 2009 due to lower grades at ERA and Rössing.
. The development phase of the Oyu Tolgoi copper-gold project will now commence following satisfaction of all conditions precedent to the Investment Agreement with the Government of Mongolia. During the quarter, Rio Tinto increased its ownership in Ivanhoe to 22.4 per cent.
. In March Rio Tinto and Chinalco signed a non-binding memorandum of understanding to establish a joint venture covering the development and operation of the Simandou iron ore project in Guinea.
. Construction of the Kennecott Utah Copper Molybdenum Autoclave Process (MAP) facility is to restart, with the investment of $340 million in phases one and two of the project.

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.

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