core sector communique

Rio Tinto Second quarter 2011 operations review 

 

Chief executive Tom Albanese said “Operations largely recovered from the severe weather impacts earlier this year, although some port and rail constraints remained. This quarter was also characterised by continued strong prices for most of our metals and minerals, but with worsening adverse exchange rates and some input cost pressures. Our growth programme was boosted by the successful $4 billion acquisition of Riversdale, giving us further options to develop our tier one assets.”

• Global iron ore production of 49 million tonnes attributable (62 million tonnes on a 100 per cent basis) was up 12 per cent on the second quarter of 2010 and up 17 per cent on the first quarter of 2011.

• First half iron ore shipments of 110 million tonnes (100 per cent basis) from the Australian and Canadian operations were six million tonnes lower than 2010 first half following several cyclones, widespread flooding and a subsequent train derailment in the first quarter of 2011 in Western Australia.

• Mined copper was down 24 per cent on the second quarter of 2010, primarily reflecting lower grades at Escondida and Kennecott Utah Copper.

• Bauxite and alumina production improved by eight per cent and six per cent on the rain-impacted first quarter as the Queensland operations recovered. Bauxite production was up 11 per cent compared with the same quarter of 2010 whilst alumina and aluminium production were flat.

• The Queensland coal mines steadily recovered from the severe rains of the first quarter. Hail Creek was the last Rio Tinto mine to lift force majeure on 12 May. 

 Australian hard coking coal production was nine per cent higher than the first quarter but was down 26 per cent on the second quarter of 2010 due to the heavy rains.
 Australian thermal coal production was 18 per cent higher than the first quarter and five per cent higher than the second quarter of 2010.

• On 22 April, Rio Tinto, its subsidiary Simfer and the Government of Guinea signed a Settlement Agreement securing Rio Tinto's mining title in Guinea and paving the way for first shipment of iron ore by mid-2015. In recognition of the resolution of all outstanding issues and finalisation of new investment agreement terms, Simfer paid $700 million to the Guinean Public Treasury.

• On 20 June, Rio Tinto’s interest in Riversdale Mining Limited increased to 99.76 per cent. Riversdale was delisted on 7 July and the process has commenced to compulsorily acquire the remaining shares.

• In the first half of 2011 Rio Tinto increased its interest in Ivanhoe Mines Ltd from 40.5 per cent to 46.5 per cent and participated in Ivanhoe’s rights offering for a total consideration of $1.25 billion.

• On 10 February, Rio Tinto announced a $5 billion capital management programme. By 13 July, 39 million Rio Tinto plc shares had been bought back at a total cost of $2.7 billion.

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.