Rio Tinto boosts iron ore shipments

“Our expanded Pilbara infrastructure is in place, and the iron ore product group is successfully commissioning and testing the system, reflected in the increased iron ore shipments to our customers during the period”, chief executive Sam Walsh said.

Looking ahead, the company said it is on track to meet its outlook for full-year iron ore shipments.

In a sign market conditions may be improving, the miner dipped into its inventories – 4 million tonnes from its Australian operations and 1 million from the Canadian business – after production fell short of shipments.

Rio shipped 85.55 million tonnes from the Pilbara during the quarter, including tonnes owned by joint venture partners like Gina Rinehart’s Hancock Prospecting, which was 16 per cent more than in the previous year. Sales of iron ore, which is used for making steel, accounts for roughly 90 percent of Rio Tinto’s profit. It is 3 per cent weaker year-to-date.

“Clearly, the iron ore market is reasonably tight”, said Shaw Stockbroking mining analyst Peter O’Connor in a note to clients.

Along with rivals BHP Billiton and Brazil’s Vale, the company has been ramping up production despite falling iron ore prices in an effort to corner the global market.

Spot iron ore prices now hover around $US53 a tonne.

Rio Tinto’s quarterly iron ore shipments are up 17 per cent on the previous corresponding period, as the miner completed the expansion of its Pilbara infrastructure.

Rio also produced 1.86M metric tons of hard coking coal in Q3, up 5% Y/Y, and 5.55M metric tons of semi-soft and thermal coal, up 8% Y/Y; Rio says its full-year coal guidance is unchanged at 18M-19M tons of thermal coal, 3M-3.4M tons of semi-soft coking coal, and 7.1M-8.1M tons of hard coking coal.

In its copper division, Rio Tinto said it expects its share of mined production in 2015 to reach only about 510,000 tonnes, down from earlier guidance of up to 535,000 tonnes and refined copper production to be around 215,000 tonnes down from earlier guidance of up to 220,000 tonnes.

In Friday’s regular trading session, RIO.AX is trading on the ASX at A$54.19, down A$0.06 or 0.11 percent on a volume of 552,336 shares.