Posted on 16 Apr 2009
Global mining giant Rio Tinto Ltd again says it remains committed to its $US19.5 billion ($A27.1 billion) investment deal with Aluminum Corporation of
And it has also forecast a recovery among its key Chinese steelmaking clients later this year.
Rio Tinto's chiefs have fronted about 200 shareholders at the company's annual general meeting in
Chairman Paul Skinner and chief executive Tom Albanese played down concerns about the proposed Chinalco deal.
Skinner insisted
"We fully understand the weight of shareholder opposition," Skinner told shareholders.
"We are listening very carefully to all that is being said to us on this point.
Several shareholders at the meeting expressed a range of concerns about the deal, which
Some major shareholders fear the deal will dilute their stakes in
Rio Tinto, the world's third largest mining company on Wednesday released its production review of the first three months of 2009, saying global iron ore production is 15 per cent down on the same period last year.
The fall was due mainly to wet weather affect Rio Tinto's Western Australian iron ore mines.
Iron ore production from Pilbara iron ore operations was also down 15 per cent on the first quarter of 2008.
"Global iron ore guidance for 2009 remains around 200 million tonnes (100 per cent basis) with an expected recovery in Chinese steel demand in the second half of 2009," the report said.
Chief executive Tom Albanese said the Chinalco deal remained a key priority, and that the timing of a global recovery was still uncertain.
"We remain committed to delivering the Chinalco transaction and our focus is on successfully navigating the regulatory processes before putting it to a shareholder vote," Mr Albanese said in a statement.
He also said the company had acted swiftly where necessary to reduce costs.
"Markets remain volatile and the timing of global economic recovery uncertain," Mr Albanese said.
"We made good progress on divestments in the quarter, with sales of $2.5 billion agreed," he said.
Aluminium output during the first quarter fell six per cent compared to the corresponding period last year, to 948,000 tonnes, and was down four per cent from the final quarter of 2008.
Mined copper production was up nine per cent on the first quarter of 2008, amid significant recovery in copper grades at Kennecott Utah Copper and Grasberg.
Refined copper production was up 33 per cent on the first quarter of 2008.
Hard coking coal production was 1.372 megatonnes (mt), up 32 per cent on the first quarter of 2008, but Australian thermal coal production fell two per cent.
The report said Rio Tinto had seen no significant movement in net debt and that uranium production was steady at 3.4 million pounds.
A senior research analyst with Ord Minnett, Peter Arden, said Rio Tinto produced a solid production report.
"They are doing fairly well, and while there are some tough spots in it, on balance it is a pretty reasonable outcome, I think for them," Mr Arden said.
"Iron ore production is down a lot, but that is partly because there was a lot of bad weather.
"They had washouts and lost quite a lot of rail capacity, so in their minds they have definitely been trying to manage their production," he said.
Mr Arden said he was not surprised that the company's huge net debt did not significantly change.
"Obviously in recent days they have gone into the bond market, and that has some ramifications, but they haven't made any big asset sales.
"That was never likely," he said.
Meanwhile, Coal & Allied, a company 75.7 per cent owned by Rio Tinto, revealed that it was also hit by rainy weather in its
In its first quarter production report released on Wednesday Coal & Allied said its share of saleable coal production was down nine per cent compared to the same time last year.
"During the quarter, production was adversely impacted by wet weather conditions," a company said in a statement.
Coal & Allied said its first quarter sales were 16 per cent lower than in the preceding three months.
Rio Tinto shares closed 61 cents higher at $57.35 while Coal & Allied shares finished five cents higher, to $73.10.
