Rio's record final quarter

Finance

Rio Tinto has reported record production results for the three months to end-December. Chief executive Tom Albanese noted that "across the group, production has bounced back from the severe weather conditions experienced in the first half, which had the biggest impact on Australian iron ore, coal and uranium".

Mr Albanese commented that the group's expansion programme "continues apace", and global iron-ore production reached a record of 65Mt in the final quarter (51Mt of which was attributable), enabling Rio Tinto to report 245Mt for the full year (192Mt attributable).

Rio Tinto reported record global iron-ore shipments of 239Mt (although below annual production due to the extreme first-half weather conditions). Indeed, Rio Tinto's Pilbara ports operated at above annualised capacity rates (shipping a record 61Mt in the fourth quarter, and 225Mt for the full year).

Australian hard coking-coal production was 16% higher than the fourth quarter of 2010 but 2% lower year-on-year. Australian thermal coal output was 3% lower compared with 2010, whilst semi-soft coal production slipped 7%.

For copper, lower grades at Escondida and Kennecott Utah impacted mined production, with output down 23% year-on-year (in line with guidance).

Full year bauxite production was 7% higher, alumina was down 1% and aluminium up 1%. The group's annual aluminium capacity has been reduced by 462,000t due to the shutdown of two thirds of Alma, and power issues at Lynemouth and Shawinigan.

Following the approval of an additional US$2.7 billion capital investment on the Kitimat aluminium smelter, total capital expenditure for 2012 is expected to be US$15 billion.

On the corporate front, Rio Tinto completed its all-cash offer for Hathor Exploration Ltd on January 12.

The group's 'standstill agreement' with Ivanhoe Mines Ltd expired on January 18, and Rio Tinto said this week that it "expects to acquire additional shares" beyond its current holding of 49%.

As at end-December, Rio Tinto had bought back US$5.5 billion (91 million) of its own 'plc' shares under the US$7 billion buy-back programme (due to be completed by the end of March).