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Rio Tinto announces “strong” third quarter results

World Coal,

Rio Tinto has announced “strong” third quarter results, despite continuing volatility in commodity markets, according to its CEO, Tom Albanese.

Australian coal operations

In addition to the headline record production of Pilbara iron ore, thermal coal production was 18% higher than the third quarter of 2011 and 7% higher than the year-to-date in 2011. This reflected increased plant capacity at Bengalla, the continuing ramp-up at Clermont and changes in mine sequence following the revised mine closure plan at Blair Athol. The Blair Athol thermal coal mine will finish mining operations by the end of this year.

Hard metallurgical coal production in Australia was 16% below the third quarter of 2011, due to the impact of dragline maintenance at Hail Creek and a major preparation plant shutdown at Kestrel as part of the mine extension project.

Rio Tinto also noted that, in response to ongoing cost pressures and high inflation impacting the coal business in Australia, it is taking actions to reduce controllable costs and increase productivity.

Rio Tinto Coal Mozambique ramping up

At Rio Tinto’s Mozambique operations, production at the Benga mine in the Moatize basin continued to ramp up. Work is progressing to expand capacity on the Sena railway line, which remains the system bottleneck.

2012 production guidance

In 2012, Rio Tinto’s share of Australian hard coking, semi soft coking and thermal coal production is expected to be 8.5 million t, 3.5 million t and 19.5 million t, respectively.

Exploration news

Rio Tinto also announced that its pre-tax and pre-divestment expenditure on exploration and evaluation in the first nine months of 2012 was US$ 1.503 billion compared with US$ 798 million in the same period of 2011. Of this, the energy group (including coal) accounted for about 14% of the total.

In the Bowen basin, Rio Tinto noted that drilling programmes to support order of magnitude studies at Mt Robert and Elphinstone, near Hail Creek, are nearing completion.

Adapted from press release by Jonathan Rowland.

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