Rio Tinto Group, the world’s third- largest mining company, said third-quarter iron ore output rose to a record. The company’s shares climbed to a two-year high.
Production expanded to 47.6 million metric tons in the three months ended Sept. 30, from 47 million tons a year earlier, London-based Rio, the world’s second-biggest exporter of the commodity, said today in a statement.
Rio approved $1.3 billion of expansions at its Australian iron ore mines in the quarter as demand surged from steel mills in China, the world’s biggest producer of the alloy. The company also set production records for alumina and coking coal and is running its mines at close to or above capacity to benefit from strong prices, Chief Executive Officer Tom Albanese said today.
“It’s all about iron ore, the operations are running well and it was a very solid quarter,” Olivia Ker, an analyst at UBS AG in London who has a “buy” rating on the stock, said today by phone. “The story for Rio this year is to get a year of good delivery under its belt and re-focus on growth, and this is exactly what they are doing. With the iron ore price ticking up, it’s all playing out well for them.”
Rio rose 2.4 percent to 4,134.5 pence at the 4:30 p.m. close in London, the highest since Sept. 1, 2008. It earlier advanced 4.4 percent to A$82.08 on the Australian stock exchange. The stock, which has 25 “buy,” four “hold” and one “sell” recommendation among analyst outlooks compiled by Bloomberg, has gained 22 percent in London trading this year.
“Our investment in organic growth is gathering momentum,” Albanese said in the company’s statement
China, Prices
Metal prices gained 23 percent in the quarter, according to the London Metal Exchange index, a measure of six metals including copper, aluminum and nickel. China’s economy will likely grow 9.9 percent this year from a year earlier and reach 10 percent in 2011, the Caijing magazine reported this week, citing a study by the Chinese Academy of Social Sciences.
The iron ore price is likely to extend recent gains through the fourth quarter as Chinese buyers, the world’s biggest, and other consumers restock, UBS analysts led by Sydney-based Tom Price wrote in an Oct. 12 report. The price for ore shipped to China has risen 7 percent this month to $150.80 a ton, according to The Steel Index.
Production of coking coal rose 17 percent to 2.4 million tons after Rio increased investment in the operations in Australia, it said. Thermal coal output declined 14 percent because of wet weather at the Hunter Valley mines in Australia. The company reduced its thermal coal forecast by 3 percent for 2010 to 19.1 million tons.
Lower grades at the Grasberg mine in Indonesia cut mined copper output by 19 percent to 159,700 tons and gold by 33 percent to 187,000 ounces, it said. Its full-year mined copper production forecast was cut 4.3 percent to 660,000 tons. Alumina output gained 6 percent.
豫公网安备41010502003434号