By Rhiannon Hoyle
SYDNEY--Rio Tinto PLC (RIO) said iron-ore shipments rose by 5%
last year to a new record as it expanded mining operations in
Australia's iron-rich Pilbara region betting on continuing strong
demand from Chinese steelmakers.
The Anglo-Australian mining company said it produced 266 million
metric tons of the raw steelmaking ingredient in 2013 and shipped
259 million tons to customers in countries like China, the world's
largest buyer of iron ore used to make steel for everything from
skyscrapers to luxury sedans.
Higher production of the bulk commodity illustrates Rio's
confidence China's economy will continue to expand at a strong
rate, and that its manufacturing and construction industries will
stay robust.
Rio, the world's second largest iron-ore producer, behind Vale
SA (VALE), said in November it was looking to spend around US$2
billion to boost its annual iron-ore output in Australia by more
than a fifth over the next four years.
Analysts say rising iron-ore output should push iron-ore prices
lower over the next few years. Still, Rio has said it can continue
making money at lower prices, with its mines in the Pilbara being
among the lowest-cost operations in the world.
The new $2 billion plan follows a recent multiyear expansion
program to lift the mining company's Pilbara production to 290
million tons a year from 230 million, a level it aims to maintain
consistently from the end of June.
Rio separately reported a 15% increase in annual copper output
to 631,500 tons, and a 10% increase in bauxite production to 43,200
tons.
Alumina production was up 1% on-year at 7.0 million tons,
although the company said it would start ramping down its Gove
alumina refinery in Australia's Northern Territory from February
before shuttering the site in July.
Rio said in November that it would halt production of alumina at
the unprofitable refinery, which has struggled with low prices and
Australia's high exchange rate.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
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