Rio Tinto Q1 Iron Ore Production Rises 8%, Shipments Up 16%

(RTTNews) - Anglo-Australian mining giant Rio Tinto Plc (RTNTF, RIO, RIO.L, RTPPF) reported Monday that global iron ore production for the first quarter grew eight percent from last year, reflecting the continuing ramp up of mining operations in the Pilbara region. The company reported record first-quarter iron ore production, shipments and rail volumes. The company also maintained its full-year 2014 production guidance.

"Rio Tinto has started the year with a series of performance records as we continue to drive productivity gains across our operations. Our Pilbara iron ore business has again set new benchmarks for production, shipments and rail volumes for the first quarter and we are well on track to reach nameplate capacity of 290Mt/a by the end of the first half of 2014," Chief Executive Sam Walsh said in a statement.

Rio Tinto, the world's second largest iron-ore producer, said global iron ore production for the first quarter increased 8 percent from last year to 66.4 million tons, with Rio Tinto's share also growing 8 percent from last year to 52.3 million tons. Iron ore accounts for roughly two-thirds of the profit of Rio Tinto.

At Pilbara, iron ore production grew 10 percent to a new first quarter record of 63.4 million tons from last year, driven by productivity improvements and the continued ramp up towards 290 metric tonnes per annum or Mt/a. Sales also set a new first quarter record of 64.2 million tons, up 17 percent from last year. The mines in the Pilbara region are among those having the lowest cost of operations in the world.

The company noted that shipments from the Pilbara exceeded production in the quarter, despite the impact of severe tropical cyclone Christine which closed ports and coastal rail operations in late December and affected the progressive recovery of mine, rail and ports into January and February.

Global iron ore shipments for the quarter grew 16 percent to 66.7 million tons from the year-ago quarter.

In the quarter, total mined copper production improved 17 percent, primarily benefiting from higher grades at Kennecott Utah Copper and production at Oyu Tolgoi. Bauxite production for the quarter grew 5 percent, while aluminum production remained flat with last year.

"Our mined copper production benefited from higher ore grades at Kennecott Utah Copper and production ramp up at Oyu Tolgoi and we also had a record first quarter for bauxite, primarily driven by higher production at Weipa," Walsh added.

In the quarter, hard coking coal's production was up 14 percent, and semi-soft and thermal coal production grew 12 percent from last year.

The company noted that the full ramp up is well on track to achieve 290 Mt/a nameplate capacity by the end of the first half of 2014. It is also remains on track for completion of expansion of the port, rail and power infrastructure capacity to 360 Mt/a by the end of the first half of 2015.

The ramp up will see Pilbara mine production capacity increasing by more than 60 million tons between 2014 and 2017, with production of 330 million tons expected in 2015, compared to production of 250.6 million tons in 2013.

Rio Tinto revealed that exploration and evaluation expenditure was $155 million in the first quarter, sustaining the savings achieved in 2013 whilst progressing the highest priority future growth projects.

Looking ahead to 2014, the company said production guidance remains unchanged at about 295 million tonnes (100 percent basis) from its global operations in Australia and Canada, subject to weather constraints.

In Tuesday's regular trading session, RIO.AX is currently trading on the ASX at A$63.48, up $0.22 or 0.35% on a volume of 0.82 million shares.

RIO closed Monday's regular trading session at $56.86, up $1.15 or 2.06% on a volume of 1.57 million shares.