Wild Weather Hits Rio Tinto Coal and Iron Ore Output

Coal down 12%, ore down 3%

Global mining giant Rio Tinto on April 13 said Australia's wild weather had seen first-quarter iron ore output shrink 3% from a year earlier and steelmaking coal slump 12%.

The Anglo-Australian firm said production had dropped sharply as Australia's north was hit by record flooding and tropical cyclones hammered the vast continent's east and west coasts.

"Our Australian coal, iron ore, uranium and alumina operations were affected by the extreme weather in the first quarter, but most are recovering and are benefiting from continued strong prices," chief executive Tom Albanese said.

Global iron ore fell 3% from the first quarter of 2010 to 42 million tons -- a 16% plunge on the previous record-breaking quarter as cyclones and flooding struck the mineral-rich Pilbara region.

"The impact of three tropical cyclones and additional tropical low depression systems caused out-loading operations to be suspended several times during the quarter, with the resultant loss of approximately nine shipping days," Rio said in its first-quarter operations report.

"Severe monsoonal rains" in coal mining Queensland state saw coking, or steelmaking, coal output slip 12% year-on-year to 1.6 million tons, which was 29% lower than the fourth quarter of 2010.

Thermal coal, burned to produce electricity, held at a consistent level of 4.0 million tons, with other Australian mines making up the shortfall.

Rio had to declare force majeure at all four of its Queensland coal mines after heavy flooding swept the state, swamping tens of thousands of homes and killing more than 30 people. One of the mines remains closed.

Albanese said Rio had successfully taken control of Mozambique-focused coal miner Riversdale and "plan to accelerate the development of these significant tier one coking coal assets."

It had also expanded iron ore capacity in the Pilbara by five million tons in the quarter to 225 million tons per annum. Rio is targeting 333 mtpa by the second half of 2015.

Rio flagged annual iron ore production of 191 million tons, 9.3 million tons for steelmaking coal and 18.2 million tons for thermal coal.

Copyright Agence France-Presse, 2011

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