- THE MAGAZINE
Rio Tinto Announces First Quarter Production Results (posted 4/18/08) Commenting on Rio Tinto plc’s first quarter’s production results, Tom Albanese, chief executive, said, “Our expansion drive continues to pay off with a record-breaking first quarter for the iron ore and aluminum product groups. Markets remain very strong and the prices of many of our products are at record highs, bearing out our view that the U.S. slowdown will have little effect on global metal and mineral supply and demand balances.
“The integration of the Alcan acquisition is going well, and our investment assumptions for this business are already being exceeded. This year we expect to invest at record levels across the group in bringing new production on-stream, so we can continue to benefit from economies undergoing rapid, metals-intensive phases of development.”
First quarter bauxite production was 106% higher than the first quarter of 2007 and 20% higher on a proforma basis. First quarter alumina production was 236% higher than the first quarter of 2007 and 10% higher on a proforma basis. The Yarwun alumina refinery operated consistently at its rated capacity of 1.4 million tonnes per year, increasing production by 17% when compared with the first quarter of 2007, when maintenance shutdowns occurred.
During the quarter, Rio Tinto reached agreement on the first two sales under its planned program to divest around $10 billion of assets in 2008. The sale of the Greens Creek silver, lead and zinc mine in Alaska for $750 million was announced, and the sale of the Cortez gold mine in Nevada was completed for $1.695 billion.
In addition, Rio Tinto will benefit from a deferred bonus payment in the event of a significant discovery of additional reserves and resources at the Cortez gold mine, and will also retain a contingent royalty interest in future production. Funds from these sales will be used to pay down part of the debt raised to finance the Alcan acquisition.
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