Rio Tinto is expected to report a full year net profit of $US14 billion next month after beating fourth quarter production estimates at its Western Australia iron ore operations yesterday.
The company showed better than expected copper output and was on track with coking coal production expectations, below guidance due to the Queensland floods.
"Running our operations at full capacity was a priority for Rio Tinto in 2010 in an environment of strong prices for most of our commodities," chief executive Tom Albanese said.
Rio’s four Queensland mines remain in force majeure following the floods.
The mines are operational but constrained, with Rio saying it will not know the affects of the weather for some time.
"Rio Tinto is currently unable to provide an estimate of the full impact of this adverse weather, or the duration of the force majeure declaration," the company said.
The miner wouldn’t give updates on how its mines were running.
UBS analyst Glyn Lawcock said he understood the newly opened Claremont mine was affected by the flood as there was no update on a restart.
According to Lawcock, Rio restarted mining at the Kestral underground mine a week ago and is still focusing on rebuilding inventories, as well as the potential for railing coal to the Abbott Point terminal, asthe Dalrymple Bay Coal Terminal is still inaccessible.
Its Hail Creek project is producing at around capacity and the Blair Athol mine is also running, but below capacity, Lawcock said.
Iron ore production was 224.3 million tonnes last year , with a rise at its WA mines of 7 per cent to 60.79 million tonnes.
Iron ore is expected to account for three-quarters of the company’s expected full year profit, Macquarie analyst Lee Bowers adding that the company is doing very well with its production.
"The fourth-quarter result is very hard to find fault with," he said.
He estimated Rio’s coal production in Queensland would be down about 20 per cent in the March quarter due to the rain, as compared to the same period in 2010.
Prior to the production report, analysts expected Rio to post a 120 per cent rise in 2010 underlying profit to $US14 billion, up from $US6.3 billion in 2009.
"We expect consensus may rise slightly and sit around the low $US14bn level post incorporation of today’s report," Lawcock said.
Rio is due to report its full-year earnings on February 10.