Global miner Rio Tinto is on track to hit its 2011 iron ore production target after posting on Thursday a 12 percent rise in second-quarter output on the year, but its Australian coal operations were still recovering from floods. Flooding and cyclone damage to mining operations contributed to the biggest slump in 20 years in Australia's GDP in the first quarter. The economy relies on coal as its single largest export earner and has been bracing for a fall of 5 percent in shipments.
Rio lowered its hard-coking coal output guidance for full-year 2011 to 8 million tonnes from 9.3 million tonnes previously due to the continued impact of damage from severe rains in the first quarter. The Australian Bureau of Agricultural and Resources and Sciences forecast total Australian coking coal exports of 150 million tonnes in 2011.
"Operations (coal) largely recovered from the severe weather impacts earlier this year, although some port and rail constraints remained," Rio Tinto Chief Executive Tom Albanese said in a statement accompanying quarterly production data.
Rio Tinto said its hard-coking coal production in Australia was 9 percent higher than the first quarter but was down 26 percent on the second quarter of 2010 due to the rains. Rival BHP Billiton, which mines more coal in Australia than Rio Tinto, is also expected to show a slow recovery from the floods when it reports quarterly production on July 20.
Albanese flagged the potential impact on future earnings of "worsening adverse exchange rates and some input cost pressures", after a second quarter characterised by strong prices for most metals and minerals. Rio's Australian thermal coal production was less affected by damage from the floods, and at 4.8 million tonnes was 18 percent higher than the first quarter and 5 percent up on the second quarter of 2010.
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