By Alex MacDonald
LONDON--Rio Tinto PLC (RIO) has suspended some mining operations
in Madagascar for two months in response to high global stockpiles
of titanium dioxide, a powder used as a pigment in paint and
plastics.
Much of the world's titanium dioxide comes from ilmentie, a
mineral that Rio Tinto produces at its Madagascar mine, called
QMM.
"We are temporarily suspending our main mine operations at the
QMM mine for a period of two months whilst we work through
inventory on site. There was a similar shutdown 12 months ago," Rio
Tinto spokesman David Outhwaite said in an email.
The mining giant owns 80% of QMM, or QIT Madagascar Minerals.
The other 20% belongs to the Madagascar government.
Rio Tinto ships ilmentie produced in Madagascar to plants in
Canada, where it is processed into titanium oxide. The mine is due
to ramp up its production capacity of 750,000 metric tons of
ilmenite a year.
Analysts at Liberum Capital said the temporary shutdown "may
reflect conditions that are worse than we currently build into our
model."
It expects Rio Tinto's iron and titanium division to deliver
around $400 million of net earnings in 2014, or about 4% of the
group's net profit next year.
-Write to Alex MacDonald at alex.macdonald@wsj.com
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