Rio iron ore output hits record amid 'marked drop in sentiment'

World number three miner Rio Tinto has had a strong second quarter of 2012 across most of its portfolio, with record first half iron ore production, and copper, bauxite, alumina, coking coal and titanium dioxide production all higher than in the second quarter of 2011.

“Global economic conditions and sentiment dropped markedly in the second quarter,” chief executive Tom Albanese said in a statement.

"We are keeping a close eye on the pace of the US recovery, the continuing Euro-zone crisis and the impact of efforts to stimulate the Chinese economy on the markets that we serve.

“Our investment programme remains resilient to market volatility, however, as our tier one projects are robust under any probable macroeconomic scenario.”

Highlights from Rio Tinto's second quarter operations review:

• First half iron ore production of 120 million tonnes (94 million tonnes attributable) and shipments of 115 million tonnes were both four per cent higher than the first half of 2011. Global iron ore production for the quarter totalled 62 million tonnes (49 million tonnes attributable), in line with the second quarter of 2011.

• During the quarter, Rio Tinto announced further investments to advance the expansion of its industry leading Pilbara iron ore business to 353 million tonnes per annum (Mt/a) and to progress further the Simandou iron ore project in Guinea.

• Mined copper production was five per cent higher than the second quarter of 2011, primarily driven by processing efficiencies and higher copper grades at Escondida.

• On 18 April 2012 Rio Tinto and Ivanhoe Mines Ltd signed an agreement under which Rio Tinto agreed to support and provide certain elements of a comprehensive funding package for Ivanhoe that will underpin the development of the Oyu Tolgoi project.

• Bauxite and alumina production were eight per cent and five per cent higher than the second quarter of 2011. Aluminium was 12 per cent lower than the second quarter of 2011, primarily reflecting the shutdown of two thirds of capacity at Alma, due to a labour dispute that has now been resolved. Construction of the Yarwun 2 alumina refinery expansion was completed during the quarter with first commercial production expected in the third quarter of 2012.

• Hard coking coal production was 13 per cent higher than the second quarter of 2011, and thermal coal production was consistent with the second quarter in 2011. In June 2012, Rio Tinto announced the first shipment of premium hard coking coal from its Benga Mine in Mozambique.

• Titanium dioxide feedstock production increased five per cent from the corresponding period in 2011.