Rio posts sharp jump in iron ore output

Rio Tinto Ltd has reiterated its full year guidance after posting a steep rise in iron ore output in the second quarter that beat analyst expectations.

The miner's iron ore production rose 7% year-on-year in the three months to June to 51.829 million tonnes, from 48.6 million tonnes.

The result pushed first half iron ore output to a fresh record and came in well above the 51.2 million tonnes put by a Bloomberg survey of median analyst estimates.

Rio said it was on track to meet its $750 million targeted reduction in exploration and evaluation spend in 2013, with spending in the first half down by $483 million year-on-year. 

Under new chief executive Sam Walsh, Rio has embarked on an aggressive $2 billion cost cutting drive this year across its mining and corporate offices (see Tim Treadgold's Re-examining Rio). 

In its June quarter operations review, Rio said its full-year iron ore production guidance remained unchanged at 265 million tonnes, from global operations in Australia and Canada, subject to weather constraints.

Rio said it had achieved record first-half iron ore production, shipments and rail volumes despite shipping delays and unseasonal wet weather which led to flooding in the Pilbara.

Earlier this month, Rio Tinto launched the first shipment of copper-concentrate from the $US6.2 billion Oyu Tolgoi mining project, which has been hit by a string of delays amid ongoing tensions with the Mongolian government.

Mined copper output came in at 146,000 tonnes, well above the Bloomberg median estimate of 115,000 tonnes.

Rio noted the recovery from the recent mine slide at Bingham Canyon copper mine was advancing faster than expected.

Hard coking coal production took a hit, with Rio posting 1.9 million tonnes for the quarter, well short of median analyst estimates of 2.43 million.