Rio Tinto iron ore output reaches record level in Q3, copper output up 30 pct

Rio Tinto iron ore output reaches record level in Q3, copper output up 30 pct

	Published : Wed, 17 Oct 2007 06:41 By : Agencies Print this Story

SYDNEY (Thomson Financial) - Rio Tinto, the world's third-largest mining group, said Wednesday its iron ore output reached a record level in the third quarter as it cranked up operations at its mines in Western Australia's Pilbara region to meet soaring demand from Asian steel makers.

The group's copper division, which was Rio Tinto's largest contributor to group earnings in 2006, also improved its performance, lifting refined copper output 30 percent from a year before, when the group's Kennecott Utah copper smelter in the US was shut down for scheduled maintenance.

Rio Tinto said in its third-quarter production report that iron ore production rose to 36.39 million tonnes in the third quarter from 35.74 million tonnes in the second, taking output for the first nine months of 2007 to 105.75 million tonnes, up from 97.7 million tonnes a year earlier.

The rise in iron ore output comes ahead of annual price negotiations for iron ore sold under contract. Supply tightness has led to market expectations that Australian iron ore miners will win price increases of more than 30 percent for the year starting April 1.

Rio Tinto said production at its Australian iron ore mines, the source of most of the group's iron ore output, was 11 per cent higher in the first nine months, despite two derailments which impacted production in the third quarter.

The company said its new Yandicoogina iron ore mine in the Pilbara region reached its capacity of 52 million tonnes a year during the third quarter, making it the largest single iron ore mine in Australia.

Rio Tinto said development of its 50 percent-owned Hope Downs project, also in the Pilbara region, neared completion in the third quarter. Once in production, Hope Downs will add 22 million tonnes per annum to Rio Tinto's iron ore production.

The group said that while production is increasing, margins in the Pilbara region remain under pressure due to continuing increases in contractor and other mining input costs.

'Further measures have been put in place to ensure tighter control of manageable costs,' it said.

(1 US dollar = 1.12 Australian dollars)

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