core sector communique

Rio Tinto - First quarter 2011 operations review

 

Chief executive Tom Albanese said “Our Australian coal, iron ore, uranium and alumina operations were affected by the extreme weather in the first quarter, but most are recovering and are benefiting from continued strong prices. We have successfully gained control of Riversdale Mining Limited and plan to accelerate the development of these significant tier one coking coal assets.”

• Global iron ore production of 42 million tonnes attributable (53 million tonnes on a 100 per cent basis) was down three per cent on the first quarter of 2010 and down 16 per cent on the fourth quarter of 2010. Operations in the Pilbara were disrupted by three tropical cyclones and widespread flooding. 
• Capacity of Pilbara iron ore operations increased to 225 million tonnes per annum (Mt/a) at the end of the first quarter, following completion of the first debottlenecking project at the Dampier port. 
• Mined copper was down 14 per cent on the first quarter of 2010, reflecting lower grades at Escondida and Grasberg.
• Alumina production was down four per cent on the first quarter of 2010, primarily due to heavy rains in Queensland. Bauxite and aluminium production were broadly flat. 
• Severe monsoonal rains led to the declaration of force majeure at the four Queensland mines at the end of 2010 and remains in place at Hail Creek.
  - Australian hard coking coal production was down 12 per cent on the first quarter of 2010 and down 29 per cent on the fourth quarter of 2010.
  - Australian thermal coal production was consistent with the first quarter of 2010. Higher New South Wales production mitigated the Queensland interruptions. 
• On 8 February, Rio Tinto approved a $933 million investment to extend the life of the Marandoo iron ore mine by 16 years to 2030.  
• On 10 February, Rio Tinto announced a $5 billion capital management programme. By 12 April, 15.6 million Rio Tinto plc shares had been bought back at a total cost of $1.1 billion. 
• On 7 April, Rio Tinto approved $238 million to advance a feasibility study for extending the life of Kennecott Utah Copper's Bingham Canyon Mine in Salt Lake City, and for the purchase of related long-lead time equipment. 
• By 12 April, Rio Tinto had assumed control of Riversdale Mining Limited, following the acquisition of a 52.6 per cent interest in the company, delivering control of significant tier one coking coal projects.

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.