Reuters: Global Markets: Rio Tinto Q1 iron ore, copper miss forecasts, shares drop

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Rio Tinto Q1 iron ore, copper miss forecasts, shares drop Apr 17th 2012, 06:04 SYDNEY | Tue Apr 17, 2012 2:04am EDT SYDNEY (Reuters) - Rio Tinto (RIO.AX) (RIO.L) reported worse falls than expected in iron ore and copper production in the first quarter after it was hit by bad weather, knocking the global miner's shares lower. Rio Tinto, the world's second biggest producer of iron ore after Vale (VALE5.SA) and a key supplier to the Chinese steel sector, said its share of production from mines it owns outright and in joint ventures dropped 11 percent to 45.6 million metric tonnes in the quarter versus 51.2 million metric metric tonnes in the previous quarter. Analysts had been expecting output closer to 50 million metric tonnes. Iron ore production on a 100 percent basis in the March quarter was 59 million metric tonnes versus 65 million in the previous quarter. The shortfall has been helping shore up seaborne-traded iron ore prices despite slowing demand from China, the biggest buyer of Australian ore. Mined copper output fell 13 percent to 119,500 metric tonnes against analysts' forecasts of above 140,000 metric tonnes. Rio Tinto gave no detailed commentary on demand, but there have been market concerns that commodity imports by China will drop off this year in step with slowing industrial growth. China is the single-largest buyer of Australian iron ore. Heavy rain and two early-season cyclones drenched Rio Tinto's Paraburdoo mines during the quarter, while high sea swells generated by cyclones disrupted freighter movements at the ports of Dampier and Cape Lambert, used by Rio to ship all its Australian ore. However that was not as bad as a year earlier, when operations on the east and west coast were hit by bad weather. "We had a solid first quarter with increased production of iron ore, coal, bauxite, alumina and titanium dioxide compared with the first quarter of 2011," Rio Tinto Chief Executive Tom Albanese said in its latest quarterly operations report. Rio Tinto's shares, which had been trading higher ahead of the production report, fell nearly 1 percent after the release and last traded down 0.9 percent at A$64.60. The broader market .AXJO fell 0.3 percent. Rival BHP Billiton (BHP.AX) (BLT.L) is expected to report weather-related disruptions to its Australian iron ore operations on Wednesday. In aluminum, where Rio Tinto is one of the world's top producers, output fell to 854,000 metric tonnes from 961,000 metric tonnes in the previous quarter and tonnes in the year-ago period. Rio signaled a major retreat from its aluminum business last October when it unveiled plans to sell 13 assets, including smelters and alumina refineries, only four years after buying aluminum giant Alcan in one of the sector's biggest ever deals. Aluminum prices have shed about a fifth of their value since touching a peak of $2,800 per metric tonne in May last year and analysts estimate about 30 percent of global aluminum operations are loss-making. The sale, which would leave Rio Tinto's remaining aluminum business focused mainly on its more profitable Canadian operations, is designed to help the group boost its aluminum earnings' margins to 40 percent, up from 20 percent last year. (Reporting by James Regan and Sonali Paul; Editing by Alex Richardson) Link this Share this Digg this Email Reprints

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