And with all those extra cars being produced in China, plus the rising level of growth, it’s no wonder Rio Tinto said its global iron-ore production in the September quarter increased 12% from a year earlier, and it has raised its 2010 production estimate by up to 7.5%.
Iron ore output hit a record in the quarter, with "shipments to China at a high level".
That’s no surprise as China said yesterday that imports last month of iron ore topped the 64 million tonne mark for the first time ever.
Rio said that after "a strong performance in the second and third quarters, Rio Tinto expects iron ore production from its global operations, incorporating Australia, Canada and Brazil, to be between 210 and 215 million tonnes (on a 100 per cent basis) in 2009, provided there are no major seasonal weather disruptions".
That’s around 5%-7.5% above the 200 million tonne forecast at the start of this year.
So much for all those who forecast the Stern Hu affair would cause Rio lasting damage to its iron ore sales.
The company also said in its third quarter review of operations that it was seeing initial signs of recovery in some of its key markets. It was the most positive news from Rio for a year or more.
Chief executive Tom Albanese said in the statement:
"We are seeing early signs of a recovery in some of our key markets, although we remain cautious about the near term outlook.
"Our businesses continue to operate efficiently: iron ore production set a new quarterly record, with shipments to China maintained at a high level. We also benefited from higher third quarter production at all of our copper operations compared with last year.
"Cost reductions continue apace and we have made considerable progress on divestments this quarter enabling us to further reduce net debt."
Iron ore: The company said that Pilbara iron ore production was 57 million tonnes in the quarter (46 million tonnes on an attributable basis), up 18% on the third quarter of 2008, reflected strong iron ore markets with the mines consistently operating at above nameplate capacity rates.
Sales volumes from the Pilbara region of Western Australia continued at record levels, reaching 56 million tonnes during the third quarter (100 per cent basis), an increase of six per cent on the second quarter and 14 per cent higher than the corresponding quarter of 2008.
Shipments to all major markets, including the largest single market, China, were maintained at a high level and were primarily priced on a benchmark or its equivalent provisional basis.
Aluminium: The company said continued production cutbacks occurred in the Aluminium group in response to the sharp fall in demand.
Bauxite production was down 16 per cent and aluminium down four per cent, compared with the third quarter of 2008. Alumina production increased marginally.
Production at Weipa down 20 per cent. Annual production of bauxite at Weipa has been curtailed to 15 million tonnes (from 20 million tonnes in 2008) due to the sharp fall in alumina and aluminium demand and prices in recent months.
The company said that Rio Tinto Alcan’s 2009 global bauxite production "is expected to be approximately 31 million tonnes, a decline of 11 per cent on 2008".
Third quarter alumina production was one per cent higher than the same quarter of 2008. The prior year’s alumina production was impacted by a temporary blockage in the residue pipeline at the Yarwun refinery which resulted in curtailed operations and 113 thousand tonnes of lost production.
Following production cuts at the Vaudreuil (Jonquiere) and Gardanne alumina refineries announced in January 2009, the annual alumina production rate has been reduced by six per cent in 2009 compared with 2008. In September 2009, Rio Tinto Alcan began restarting idled capacity at the Vaudreuil refinery in Quebec, in response to current alumina market conditions.
Third quarter aluminium production was four per cent lower than the same quarter of 2008, on a like for like basis. A steady performance at the low cost Canadian smelters was offset by production cutbacks elsewhere in Canada and Europe.
During 2009 Rio Tinto has announced the sale of the Ningxia smelter in China, the closure of the Beauharnois smelter in Quebec, the cessation of smelting activities at the Anglesey smelter in Wales and various other curtailments. Rio Tinto Alcan’s aluminium production capacity is expected to be operating at an 11 per cent lower annual run rate at the end of 2009.
Following these actions, 42 per cent of Rio Tinto Alcan’s smelting capacity in the upper half of the industry cost curve has either been sold or curtailed.
Production in 2009 is expected to be approximately 3.8 million tonnes (Rio Tinto share), a decline of six per cent compared with 2008.
Copper: Mined copper production up 24 per cent on the third quarter of 2008 with higher production at all operations, in particular at Kennecott Utah Copper and Grasberg.
Refined copper production up 46 per cent on the third quarter of 2008 from improved performance and higher concentrate grades at Kennecott Utah Copper and higher cathode production at Escondida.
Rio said it expects its 2009 share of mined and refined copper production is expected to be 780,000 tonnes and 420,000 tonnes, respectively (that’s 5,000 tonnes lower than the earlier forecast for refined copper).
On October 5 Rio Tinto signed an Inv
