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Rio Tinto reports record performance for iron ore operation in Q4

Major international mining group Rio Tinto (LSE, ASX: RIO) reported a 49% year-on-year increase in iron ore production during the fourth quarter of 2009. The FTSE100 constituent said it has seen a recovery across most of its commodities but it remains cautious with government-backed economic stimulus programmes due to wind down across the world.

“This was another very strong quarter for iron ore production, driven by continuing high demand from China”, Rio chief executive Tom Albanese said, “In the Pilbara we achieved record sales for both the quarter and the full year and both global and Pilbara production set new records in 2009.”

Rio Tinto said it anticipates the iron ore production joint venture with BHP Billiton (LSE: BLT) will get underway in the second half of the 2010 calendar year.

During the quarter ended 31 December 2009, Rio sold 61 million tonnes of iron ore across international markets, with 56 tonnes produced from its operations in the Pilbara region of Western Australia. The level of production from the Pilbara reflects a 54% increase compared with the comparative quarter in 2008. Among the group’s other key operations, copper and gold production also improved whilst its Aluminium operations are still experiencing cutbacks. Uranium production remains in line with 2008.

Mined copper production rose 36% compared with the comparative period in 2008 with higher production at all operations. The Mexican Escondida mine and the Grasberg joint venture in New Guinea were among the most noticeable improvements. Meanwhile refined copper production was up 15% as a result of higher concentrate grades and further improvements at the company’s Kennecott Utah Copper operating subsidiary.

Rio Tinto also recorded a substantial increase in mined gold production, which rose by 141% compared with the previous year, exceeding 1.1 million ounces throughout 2009.

The Anglo-Australian miner maintained its production cutbacks among the aluminium metal group as a continued response to market conditions. Compared with the final quarter of the previous year bauxite production reduced by 1%, alumina was down 2% and aluminium production was 3% lower.

Whilst full year uranium production was consistent with the prior year, Q4 saw a 20% production decline compared with 2008, largely due to lower grades produced by the Energy Resources of Australia (NYSE:ERA) subsidiary.

The company said it continued to make further progress on its divestments programme with asset sales worth US$1.85 billion during the quarter, taking the total agreed asset sales to US$7.2 billion during 2009. The divestment programme was conceived in February 2008 and the mining group has subsequently agreed asset sales of US$10.3 billion.

Disclosure: The author holds no positions in the company