its iron ore operations, so it now expected to reach a production rate of 290 million tonnes a year by the end of 2013, up from a target of 283 million tonnes.
"GREEN SHOOTS IN CHINA"
Highlighting its advantage over rival iron ore producers, Rio said its cost per tonne of iron ore would fall from $47
delivered to China, including royalties, shipping and sustaining capital costs, once its infrastructure expansions are completed. While all iron ore producers are suffering from this year's drop in iron ore prices, which are now around $118 a tonne or more than 20 percent below this year's high, the revenue blow will be cushioned for Rio Tinto as it is producing more tonnes."There's no doubt any marginal tonnes they can produce from the Pilbara without a capex increase is a good thing," said Tim arker, a portfolio manager at BT Investment Management, which owns shares in Rio Tinto.
Rio was on track to reach 290 million tonnes a year by the fourth quarter of 2013 and expand capacity to 360 million tonnes by 2015, the company said, adding the project in Western Australia's Pilbara region remained on time and on budget. Rio remained cautiously optimistic about a pick-up in growth in China, its biggest customer, following a recent string of stronger-than-expected economic indicators. "More than a couple months ago, I'm cautiously optimistic about the fact that we're beginning to see green shoots in China," Albanese said.
As it shrinks to focus on its largest, highest-returning businesses, Rio Tinto has been looking to cast off its Pacific Aluminium unit and its diamonds business but has yet to decide how to get rid of those units.
It put the diamonds business on the block earlier this year soon after BHP Billiton, which managed to sell its Ekati diamond operation to Harry Winston earlier this month for $500 million. Harry Winston is a co-owner of Rio's Diavik diamond mine in Canada. Albanese said the sale of its units was still under review.