Mining giant Rio Tinto yesterday said iron ore production reached record levels in the third quarter, defying the global downturn and frictions with key market China.
The Anglo-Australian company said iron ore production was up 12 percent in the third quarter compared with a year earlier, setting a new quarterly record, with sales to China “maintained at a high level.”
“We are seeing early signs of a recovery in some of our key markets, although we remain cautious about the near-term outlook,” chief executive Tom Albanese said in Rio’s third-quarter operations review. “Our businesses continue to operate efficiently: iron ore production set a new quarterly record, with shipments to China maintained at a high level.”
Rio raised its iron ore production guidance for this year to between 210 million and 215 million tonnes, up from 200 million tonnes. Production in Australia’s Pilbara region soared 18 percent on-year with mines consistently operating above capacity, it said.
Rio’s relationship with China hit trouble in July when senior executive Stern Hu (胡士泰) was detained in Shanghai and accused of spying, and later charged with industrial espionage.
Rio denies accusations that Hu bribed steel mill officials during failed talks aimed at setting annual iron ore prices. But it insisted that shipments to China were unaffected.
Iron ore chief executive Sam Walsh said Rio had not resumed iron talks with China and was not sure when they would return to the negotiating table. But he said Rio had seen “very strong demand from all markets,” including China.
“Certainly Chinese demand has been very strong but we have also had a pick-up across each of the other markets — Japan, [South] Korea, Taiwan, Europe and North America,” Walsh told Dow Jones Newswires. “So we are pretty pleased at the way markets have picked up.”
Rio Tinto, which this month struck a multibillion-dollar agreement to mine one of the world’s richest copper deposits in Mongolia, also said copper production was up 24 percent.
But aluminum production was 4 percent lower because of falling demand. Rio also said it had sold assets totaling US$4.1 billion and used US$14.8 billion from the rights issue to pay down debt.
“We also benefited from higher third quarter production at all of our copper operations compared with last year,” Albanese said. “Cost reductions continue apace and we have made considerable progress on divestments this quarter enabling us to further reduce net debt.”
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