BUSINESS

Rio Tinto's Q3 aluminum production falls 10 per cent due to Quebec lockout

10/16/2012 05:08 EDT | Updated 12/16/2012 05:12 EST
MONTREAL - Global mining giant Rio Tinto said Tuesday production of several metals including iron ore and copper increased in the third quarter, but aluminum output was down 10 per cent from a year ago as it continued to ramp up following the end of a lengthy labour dispute in Quebec.

Rio Tinto Alcan's share of aluminum production increased by two per cent from the second quarter to 538,000 tonnes, but was down 11 per cent for the year so far compared with the first nine months of 2011.

An agreement was reached in July that ended a seven-month lockout of 780 workers at the Alma smelter, about 225 kilometres north of Quebec City.

It is one of Rio Tinto Alcan's key aluminum smelters, producing about 438,000 tonnes of aluminum a year. The lockout caused a one-third reduction in output.

Rio Tinto's Pacific Aluminum production decreased by 13 per cent during the quarter to 317,000 tonnes. The London-based miner is trying to sell or close the division's 13 assets.

Rio Tinto chief executive Tom Albanese said the miner delivered strong results in the quarter, including record quarterly results at its Pilbara iron ore operations in Australia.

Copper, bauxite, alumina, and titanium dioxide production were all higher compared to the prior year.

"Markets remain volatile, but our business is resilient and our operations are performing strongly, reflecting our consistent strategy of running large, long life, cost-competitive operations," he stated.

Global iron ore production increased five per cent to 67 million tonnes. Rio Tinto's share was 53 million tonnes.

Saleable production from the Iron Ore Company of Canada decreased by two per cent from the year-ago period, but was 23 per cent higher than the prior quarter due to better mine productivity and commissioning of a system which links a crusher at the mine site to the concentrator.

The first phase of the expansion project will increase concentrate production capacity to 22 million tonnes per year. A second phase will boost annual production by another 1.3 million tonnes, starting the first quarter of 2013.

Total mined copper production was 21 per cent higher, while bauxite and alumina increased by 13 and 20 per cent respectively.

Thermal coal production increased 21 per cent. Titanium dioxide feedstock production increased five per cent, in part due to the rebuilding of a furnace at Rio Tinto Fer et Titane.

Rio Tinto's share of diamond production at the Diavik mine was unchanged from a year ago at 1.16 million carats. It said improved grades were offset by lower processing volumes due to bottlenecks in the processing plant as a result of ore mix. Production was eight per cent higher than the second quarter as increased volumes of higher grade, more easily processed diamonds became available from the ramp up of underground mining.

Rio owns a 60 per cent stake in Diavik — 300 kilometres northeast of Yellowknife, while Harry Winston Diamond Corp. (TSX:HW) owns the rest.

The miner said its share of diamond production at Diavik and its Argyle mine in Australia will produce 12.6 million carats this year.