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Rio Tinto's 4Q iron ore production tumbles

Rio Tinto's 4Q iron ore production tumbles

Global mining giant Rio Tinto said Thursday iron ore production tumbled 18 percent in the fourth quarter as steel and other manufacturers curtailed operations sharply.
The London-based company also reported a 20 percent drop in copper production, which it blamed on operational problems that offset improved grades.
The declines, which Rio Tinto warned of in November, come as the company slashed debt and eliminates 14,000 jobs.
"We are taking firm action in response to the global economic downturn and, given the resilience of Rio Tinto's low-cost assets, expect to remain well positioned when the recovery comes," Rio Tinto Chief Executive Officer Tom Albanese said in a statement.
Rio Tinto is one of a string of mining companies around the world that have closed mines, postponed projects and laid off workers because of plummeting demand for metals used in everything from housing to electronics.
Credit Suisse analyst Jeremy Gray on Thursday lowered estimates for Rio Tinto, citing the falling demand for iron ore and coking coal. He downgraded his earnings forecasts by 17 percent for fiscal 2008, and 31 percent for both 2009 and 2010.
"While ratcheting back capex (capital expenditures) aggressively might defer growth opportunities when economic recovery does come, we still think Rio can manage its way through this turbulent period without issuing equity," he wrote in a client note.
Rio Tinto's iron production was 36 million tons, down 18 percent over the fourth quarter of 2007. That included a 10 percent drop at the Pilbara, Australia, mine after Chinese demand declined.
Production of metals related to aluminum rose after Rio Tinto added tonnage with the October 2007 acquisition of Alcan in Canada.
Bauxite production was up 19 percent, alumina was up 26 percent and aluminum was up 21 percent. On a proforma basis, bauxite rose 6 percent, alumina was up 3 percent and aluminum declined 2 percent.
Rio Tinto is scheduled to release fourth-quarter earnings next month. Its shares fell $1.66, or 2 percent, to $81.34.


Updated : 2020-12-03 01:08 GMT+08:00