Rio sees increasing tonnages in third quarter

Rio Tinto has lifted production results in the third quarter, stating that productivity improvements are now being realised.

Under the leadership of Rio Tinto chief Sam Walsh, the company is transitioning out of a high investment period towards its new model where planned expansions are coming online, albeit marked by cost conservation measures and efficiency drives.

Rio Tinto’s Pilbara operations produced 64.3 million tonnes of iron ore, setting a new quarter record which it attributed to productivity gains and the commissioning of the Hope Downs 4 mine, a joint venture with Gina Rinehart’s Hancock Prospecting.

“In iron ore we achieved record production and shipments in Western Australia following the official opening of our landmark Pilbara 290 port and rail expansion, four months ahead of its original schedule and $400 million under budget,” Walsh stated.

“We are also making further important gains in productivity across our operations and continue to drive costs out of the business.”

Rio Tinto said it is likely to exceed its $750 million exploration and evaluation spend reduction target for the year, having already cut $729 million in the nine months to September compared to the same period in 2012.

Walsh said productivity gains across its Australian operations have also resulted in “record quarterly thermal coal production”.

Ramping up production at its Clermont mine is driving thermal coal tonnage increases, achieving a 64 per cent production increase year-to-date compared to the same time last year.

The sale of Clermont mine has reportedly stalled after the company fielded low ball offers for the central Queensland operation.

Rio did however manage to offload its Blair Athol mine to Linc Energy earlier this month for no upfront cost. Rio Tinto ceased mining activities at Blair Athol in November 2012.

Production across the company’s thermal coal business jumped 14 per cent in the July quarter, compared with the same time last year.

Production across the company’s thermal coal business jumped 14 per cent in the July quarter, compared with the same time last year.

Thermal coal output at Rio’s Hunter Valley operations increased by 23 per cent in the nine months to September, with the completion of brownfield expansions and productivity gains due to operational improvements in its load and haul fleets.

However the news has not been all positive.

Results for hard coking coal fell 10 per cent in comparison with the same time last year.

A geotechnical low wall failure in July at Rio’s Hail Creek Mine, located 120 km south west of Mackay in central Queensland, is said to be in part to blame for the drop in coking coal production.

The company’s copper business has also made headlines this year with two landslides setting back production at the Kennecott Utah Copper Bingham Canyon mine in Utah, and the sale of its 80 per cent stake in the Northparkes copper mine in New South Wales to China Molybdenum removing its last vestiges of copper mining in Australia.

The transaction is subject to regulatory approvals and is expected to be close later this year.

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