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Rio Tinto posts Q1 2014 results

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World Coal,

Rio Tinto has posted its Q1 2014 results showing increases in year-on-year hard coking and thermal coal production.

Metallurgical coal down on seasonal rainfall

Rio Tinto has announced quarterly Australian hard coking coal production of 1.8 million t in Q1 2014. This is 20% down on Q4 2013 as high seasonal rainfall impacted production but up 18% on the same quarter last year, due to improved production from the Kestral mine following completion of the mine extension in the second half of last year.

Semi-soft coking coal production was 10% lower than the Q1 2013, largely due to a planned change in the production profile.

Hunter Valley drives thermal coal growth

Australian thermal coal production increased by 17% compared with the Q1 2013 due to continued productivity gains achieved in the Hunter Valley and producing thermal coal from a processing plant byproduct stream at Hail Creek.

Q1 production in Mozambique was affected by rail and port constraints, as well as operational changes in response to security considerations. Operations have been moved to a day shift only and were suspended for a period in February 2014.

Outlook: hard coking coal down; thermal up

Rio Tinto now expects its share of Australian hard coking coal production to decrease marginally to 8.2 million t from previous guidance of 8.5 million t with a consequent expected increase in thermal coal production to 16.7 million t (previously 16.5 million t, excluding production from Clermont). According to the company, this change is “driven by prioritising production of thermal coal from a processing plant byproduct stream at Hail Creek, which delivers increased margins in the current price environment”.

Semi-soft coking coal production guidance remains unchanged at 3 million t.

The company also noted that the sale of its 50.1% stake in the Clermont joint venture is expected to be completed in the first half of this year. In October last year, Rio Tinto said that it would sell its stake to GS Coal Pty Ltd, a company jointly owned by Glencore Xstrata and Sumitomo Corp., for US$ 1.015 billion.

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