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Rio Tinto plc recently released a review of its third quarter 2009 operations. “We are seeing early signs of a recovery in some of our key markets, although we remain cautious about the near-term outlook,” said Tom Albanese, chief executive. “Our businesses continue to operate efficiently: iron ore production set a new quarterly record, with shipments to China maintained at a high level. We also benefited from higher third quarter production at all of our copper operations compared with last year. Cost reductions continue apace and we have made considerable progress on divestments this quarter, enabling us to further reduce net debt.”
Continued production cutbacks occurred in the Aluminium group in response to the sharp fall in demand. Bauxite production was down 16% and aluminum down 4%, compared with the third quarter of 2008. Alumina production increased marginally. Rio Tinto Alcan has reached an agreement in principle for the sale of its 80% interest in the Ghana Bauxite Company (Awaso), subject to government approval. The purchase price has not been disclosed.
Rio Tinto Alcan recently announced that it is considering reorganizing its French operating structure and adopting additional cost reduction measures for its aluminum and specialty alumina operations. Third quarter bauxite production was 16% lower than the same quarter of 2008, with production at Weipa down 20%. Annual production of bauxite at Weipa has been curtailed to 15 million metric tons (from 20 million metric tons in 2008) due to the sharp fall in alumina and aluminum demand and prices in recent months. Rio Tinto Alcan’s global bauxite production in 2009 is expected to be approximately 31 million metric tons, a decline of 11% from 2008.
Third quarter 2009 alumina production was 1% higher than the same quarter of 2008. The prior year’s alumina production was impacted by a temporary blockage in the residue pipeline at the Yarwun refinery that resulted in curtailed operations and 113 thousand metric tons of lost production. Following production cuts at the Vaudreuil (Jonquiere) and Gardanne alumina refineries announced in January 2009, the annual alumina production rate has been reduced by 6% in 2009 compared with 2008. In September 2009, Rio Tinto Alcan began restarting idled capacity at the Vaudreuil refinery in Quebec in response to current alumina market conditions.
Production in the Minerals segment continued to be affected by lower demand in line with reduced economic activity across all major regions. In addition, planned maintenance shutdowns occurred during the quarter. Third quarter borates production recovered from the second quarter in line with an upturn in sales, albeit from a low base.
At QIT, an eight-week summer shutdown took place at the ilmenite mine and smelting operations in Canada in response to the current market uncertainty. A general decline in production volumes of approximately 20-25% across the Rio Tinto Iron & Titanium product portfolio is anticipated in 2009, compared with 2008.
Additional details are available at www.riotinto.com.