Rio Tinto has released its Q4 2012 operations review with business continuing to “perform well” despite market volatility, according to Tom Albanese, CEO of Rio Tinto. However, the company is working to “actively reduce controllable costs” within the coal business in response to lower coal prices, a high Australian dollar and high input costs.
Australian thermal coal
Australian thermal coal production for the full year was 15% higher than in 2011, and Q4 production increased 37% compared Q4 2011. This reflected increased plant capacity at Bengalla, the realisation of brownfield expansions to release latent capacity at Hunter Valley Operations and Mount Thorley Warkworth, the continued ramp-up at Clermont mine and increased ownership in the former Coal & Allied operations.
Australian metallurgical coal
Hard coking coal production in Australia was 11% lower for the full year than in 2011 and Q4 production was 31% lower than the same period in 2011. This was due to the impact of dragline maintenance at Hail Creek mine and a major preparation plant shutdown at Kestrel Mine as part of its mine expansion project.
Mozambique
During the quarter, production at the Benga mine in Mozambique continued to ramp up. Studies are progressing to expand capacity on the Sena railway line.
Coal exploration and evaluation highlights
Exploration and evaluation was up on the previous year, totaling US$ 1.976 billion compared with US$ 1.387 billion in 2011. Of this 2012 expenditure, approximately 15% was incurred by the energy group, which includes coal and uranium. This included the completion of drilling programmes in the Bowen Basin, Queensland, at Mt Robert and Elphinstone, near Hail Creek. Resource models are now being prepared.
Written by Jonathan Rowland.