Rio Tinto Q3 Iron Ore Production Rises; Backs FY14 Forecast

(RTTNews) - Mining giant Rio Tinto (RTPPF.PK, RIO.L, RIO, RTNTF.PK) reported late Tuesday higher iron ore shipments and production in the third quarter. While production of copper increased, bauxite aluminium and coal saw a decline from last year. Looking ahead, for the full year 2014, the company backed iron ore production forecast, while lifting guidance for copper output.

For the third quarter, the company's global iron ore shipments rose 15 percent year-over-year to 78.0 million tonnes. Global iron ore production grew 12 percent to 76.8 million tonnes. Sequentially, iron ore shipments grew 3 percent, and production increased 5 percent.

Rio Tinto noted that sales from the Pilbara continued to exceed production in the quarter, as the stocks that were built in anticipation of delivery of the infrastructure expansion were drawn down.

In the quarter, mined copper production edged up 1 percent to 151.8 thousand tonnes, while production of bauxite, used to make aluminum, declined 3 percent from last year to 10.89 million tonnes. Production of aluminium dropped 1 percent to 848 thousand tonnes.

Hard coking coal output was down 14 percent, Semi-soft and thermal coal production was down 13 percent, and Titanium dioxide feedstock production dropped 2 percent.

Rio Tinto chief executive Sam Walsh said, "We have seen our first full quarter from the 290 Mt/a iron ore expansion in the Pilbara, with the additional tonnes going into our premium Pilbara Blend products. Our strategy of focussing on long-life, low-cost assets means we will continue to generate strong cash flows despite a lower price environment, resulting in materially increased and consistent cash returns to shareholders."

For the full year 2014, Rio Tinto expects global shipments of approximately 300 million tonnes. The company reiterated global iron ore production forecast of 295 million tonnes, subject to weather constraints. Around five million tonnes of iron ore inventory is expected to be drawn down from the Pilbara mines during the year.

Further, Rio Tinto lifted its copper production guidance for the year to 615,000 tonnes of mined copper from the prior view of 585,000 tonnes, and refined copper production to 300,000 tonnes from 260,000 tonnes, expected earlier. The revision reflects a 15 percent increase in mined copper production in the first nine months, driven by improved recoveries at the Kennecott concentrator and the sustained ramp up at Oyu Tolgoi.

The miner continues to expect its share of bauxite and aluminium production for 2014 to be 41 million tonnes and 3.4 million tonnes, respectively. Alumina production guidance is reduced to 7.4 million tonnes, from its earlier guidance of 7.6 million tonnes.

In Australia, Rio Tinto shares were gaining A$0.15 or 0.25 percent, and trading at A$60.89.