- THE MAGAZINE
“In the near-term, the Chinese economy is pausing for breath. China is not completely insulated from an OECD recession and we will see an impact on Chinese exports. However, the near-term slowdown of growth is substantially due to tightening of monetary policy introduced by the Chinese government last year in order to tackle inflation. Furthermore, we expect third quarter economic data to show an exaggerated slowdown, reflecting the postponement of projects during the Olympics. Looking further out, Chinese GDP will remain largely driven by the domestic economy and we expect industrialization and urbanization to continue apace with strengthening demand across a range of Rio Tinto products.
“With our cost-competitive assets, resilient margins and strong customer base, Rio Tinto is well placed to weather the current economic weakness. Against the backdrop of the current markets, the Group is taking the opportunity to review the near-term spending timelines and project costs of its capital expenditure program, while preserving the optionality of its high-quality growth pipeline overall.”
Highlights from the third quarter include:
- Record quarterly global production of iron ore, up 17% from the third quarter of 2007.
- Record quarterly iron ore production in Australia of 48 million tonnes (39 million tonnes on an attributable basis), up 20% (up 17% on attributable basis) compared with the third quarter of 2007.
- Rio Tinto Alcan continued to perform well with bauxite production up 93%, alumina up by 222% and aluminum up by 371%, compared with the third quarter of 2007, reflecting the acquisition of Alcan in the fourth quarter of 2007. On a proforma basis, the respective increases for bauxite and alumina were 11% and 2%, while aluminum declined by 1%, primarily due to temporary cutbacks at Tiwai Point.
- Strong recovery in grades at Kennecott Utah Copper was offset by a decline at Escondida, which experienced operational interruptions. This led to an overall decrease in mined copper by 7% compared with the third quarter of 2007.
- Strength in Australian hard coking and thermal coal, with third quarter production up by 40% and 8%, respectively, in the third quarter of 2007.
- Record production for the U.S. coal business, up 13% from the third quarter of 2007.
- Uranium production increased 13% from the same quarter of 2007
- Continued strong performance from the minerals businesses, with borates production up 24% and titanium dioxide feedstocks up 11% compared to the third quarter of 2007.