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15 July
MELBOURNE,
Press Release
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Chief executive Tom Albanese said: "Markets remained tough in the second quarter, as expected, particularly in aluminium. The production curtailments announced in January in this product group have started to take effect and are reflected in this report. We continue to press ahead with actions to reduce costs across the board, align production with demand, and bring down levels of net debt. We have successfully completed our US$15.2 billion rights issue this month and during the course of this year we have agreed divestments to the value of US$3.7 billion." Following production cutbacks in response to the sharp fall in demand, bauxite production down 14 per cent, alumina down six per cent and aluminium down five per cent, compared with the second quarter of 2008. Second quarter trading in the aluminium business continued to experience difficult conditions and showed a slight improvement on the first quarter of 2009. Mined copper production down one per cent on the second quarter of 2008. Recovery in copper grades at Kennecott Utah Copper and Grasberg, offset by lower copper grades and continued operational issues at Escondida. Refined copper production up 23 per cent on the second quarter of 2008 from improved performance and higher concentrate grades at Kennecott Utah Copper and higher cathode production at Escondida. ALUMINIUM In the light of very difficult trading conditions, management has implemented a widespread Over 80 per cent of Rio Tinto Alcan’s capacity is positioned in the lower half of the industry cost curve. With these actions, 42 per cent of Rio Tinto Alcan’s smelting capacity in the upper half of the cost curve has been either sold or curtailed. Cost reduction measures will lead to an improvement in margins against a backdrop of Bauxite Second quarter bauxite production was 14 per cent lower than the same quarter of 2008 with Alumina Second quarter alumina production was six per cent lower than the same quarter of 2008. The expansion and upgrade of the Sao Luis (Alumar) alumina refinery (Rio Tinto Alcan share 10 Aluminium Second quarter aluminium production was five per cent lower than the same quarter of 2008. A Following the sale of the Ningxia smelter in China in January 2009, the closure of the Beauharnois Alcan downstream businesses Trading conditions in the Alcan Engineered Products businesses remained difficult during the On 6 July 2009, Rio Tinto announced that it had reached agreement to sell the Alcan Packaging On 5 June 2009, Rio Tinto announced that it had entered a non-binding agreement with BHP Billiton to establish a production joint venture of both companies' Western Australian iron ore assets. Rio Tinto successfully completed its $15.2 billion rights issue on 3 July with valid acceptances of 96.97% for Rio Tinto plc and 94.76% for Rio Tinto Limited. The proceeds will be used to pay down Group debt. About Rio Tinto Rio Tintos business is finding, mining, and processing mineral resources. Major products are aluminium, copper, diamonds, energy (coal and uranium), gold, industrial minerals (borax, titanium dioxide, salt, talc) and iron ore. Activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe and southern Africa.
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