Rio Tinto sees copper and gold output fall
Mining stocks were in the doldrums today after international miner Rio Tinto revealed lower copper and gold production.
London-based Rio Tinto was second in the list of FTSE 100 Index fallers after saying mined copper and gold volumes at some of its pits in the latest nine months fell by as much as 75% and 92% respectively.
Other miners followed Rio down, with shares in Xstrata off 3% and Anglo American, BHP Billiton and Antofagasta all losing more than 2% of their value.
Rio produces aluminium, copper, diamonds, energy products such as coal and uranium, gold, industrial minerals and iron ore.
The group’s activities span the world, but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe and southern Africa.
As well as having wholly owned subsidiaries such as Borax, Comalco, Hamersley, Rio Tinto Coal Australia, Kennecott and Rio Tinto Iron & Titanium, the group owns associate companies like Escondida and Freeport in which public shareholders, other companies or governments are partners.
Rio said third quarter demand remained strong for all its major products, with new projects in iron ore, coking coal and diamonds all boosting volumes.
The company said its Hamersley operation in Australia produced record volumes of iron ore in what is traditionally the strongest quarter of the year.
However, it said mined copper production at its Grasberg joint venture in Indonesia was 24,000 tonnes in the first nine months of 2004, 75% down on the same period last year. The joint venture mined 48,000 tonnes of gold – 92% down.
The group’s Escondida operation in Chile saw mined copper volumes fall by 19% over the period to 270,300 tonnes.
Copper volumes were also down at its Kennecott Utah operation in the US.
Analyst Charles Kernot at Seymour Pierce said the production report had disappointed on gold and copper, although the falls at Grasberg had been expected.
He added that the company’s aluminium and coal activities were “not looking too bad”.
