Even as Rio Tinto reported first quarter iron ore production down 15%, it predicted a recovery in Chinese steel demand in the second half of 2009.
Rio said reduced market demand and heavy rainfall at its Pilbara operations in Western Australian caused iron ore production to drop. "Markets remain volatile and the timing of global economic recovery uncertain," said chief executive Tom Albanese.
Albanese said Pilbara iron ore shipments fell 9% to 39 million tons compared to first quarter 2008 . He said Rio remained committed to a proposed deal with Chinalco for the Chinese state-owned firm to take a major equity stake in return for US$19.5 billion.The deal is expected to be a major issue at the annual general meeting, with some institutional shareholders reportedly unhappy that they were ignored when the company struck its deal with Chinalco. The deal, which is still under review by the Australian government, would see Chinalco double its stake in Rio to 18%, allowing the miner to reduce its massive debt burden.
Rio said bauxite production fell 19% in the first quarter, with alumina down 2% and aluminium down 6%.
Mined copper production rose 9% and refined copper production was up 33%, while Australian hard coking coal increased 32% and Australian thermal coal production fell 2%.
Copyright Agence France-Presse, 2009