Rio Tinto - Fourth quarter 2010 operations review

Chief executive Tom Albanese said: “Running our operations at full capacity was a priority for Rio Tinto in 2010, in an environment of strong prices for most of our commodities. Our success is clearly demonstrated in iron ore where we set new quarterly and annual production records. During the quarter we approved a further $5.5 billion in value-adding growth projects, including the expansion of our Pilbara iron ore operations to 283 million tonnes a year and the first phase of an aluminium smelting pilot plant in Quebec using our new AP60 technology.”
• Rio Tinto’s global iron ore operations set a new quarterly production record at 65 million tonnes (50 million tonnes attributable) and a new annual record at 239 million tonnes (185 million tonnes attributable).
• Mined and refined copper were down nine per cent and six per cent on the fourth quarter of 2009 and down 16 per cent and five per cent on full year 2009, in line with previous guidance.
• Bauxite production increased nine per cent year on year in line with higher demand. Alumina and aluminium production were broadly flat.
• Australian hard coking coal production was up eight per cent on the fourth quarter of 2009 and rose 20 per cent on full year 2009, following increased investment at the Queensland operations. Australian thermal coal production was down nine per cent overall for the year, mainly due to wet weather in the Hunter Valley.
• The force majeure declaration at the four Queensland coal mines remains in place. All the Queensland coal mines are operational but are still constrained in some way by weather impacts, including the impact on third party infrastructure. Rio Tinto is currently unable to provide an estimate of the full impact of this adverse weather or the duration of the force majeure declaration.
• On 8 December, Rio Tinto signed a new agreement with Ivanhoe Mines under which Rio Tinto will assume direct management of the Oyu Tolgoi copper-gold project in Mongolia. The agreement also gives Rio Tinto the right to increase its holding in Ivanhoe to 49 per cent.
• On 15 December, Rio Tinto completed the divestment of its remaining 48 per cent equity holding in Cloud Peak Energy Inc. The total gross proceeds from the secondary offering of $573 million were received in December.
• On 23 December, Rio Tinto announced a A$16 per share cash offer to acquire all of the issued and outstanding shares of Riversdale Mining Limited by way of a recommended off-market takeover offer.
• Rio Tinto approved major capital projects totalling $5.5 billion during the fourth quarter, bringing the full year total of project approvals to $10.8 billion.
All currency figures in this report are US dollars, and comments refer to Rio Tinto’s share of production, unless otherwise stated