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Rio Tinto reports increases in coking coal production

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World Coal,

Rio Tinto has released its 4Q16 production results, reporting increases in coking coal and lower volumes of thermal coal.

Rio reported that hard coking coal production was 4% higher in 2016 and fourth quarter volumes were 15% higher than the same quarter of 2015 due to longwall and plant outperformance at Kestrel.

The mining giant’s semi-soft coking coal production was 12% higher than 2015 and fourth quarter volumes were 22% higher than the corresponding period of 2015 due to mine production sequencing at Hunter Valley Operations and Mt Thorley Warkworth.

Increased thermal coal production from Hail Creek, Kestrel and Mt Thorley Warkworth partially offset lower volumes, which resulted from the restructure of Coal & Allied and the divestment of Bengalla in early 2016, delivering full year production that was 7% lower than 2015. Fourth quarter thermal coal production was 18% lower than the same quarter of 2015 due primarily to these ownership changes.

Coking coal prices achieved in the second half of 2016 averaged $152/t on an FOB basis compared to $79/t in the first half of 2016. Average prices realised for thermal coal were $69/t on an FOB basis in the second half of 2016 compared to $51/t in the first half of 2016.

Rio Tinto chief executive J-S Jacques said: “We have delivered a strong operational performance in 2016, underpinned by our drive for efficiency and maximising cash flow. Our disciplined approach remains in place in 2017, with the continued focus on productivity, cost reduction and commercial excellence. This will ensure that we continue to deliver value for our shareholders.”

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