SYDNEY (Reuters) - Rio Tinto Ltd/Plc <RIO.AX><RIO.L>, fighting a takeover approach from rival BHP Billiton Ltd/Plc <BHP.AX> and scurrying to capture more of the global commodities boom, churned out record tonnages of iron ore, copper and other industrial minerals in 2007.
By James Regan
SYDNEY (Reuters) - Rio Tinto Ltd/Plc <RIO.AX><RIO.L>, fighting a takeover approach from rival BHP Billiton Ltd/Plc <BHP.AX> and scurrying to capture more of the global commodities boom, churned out record tonnages of iron ore, copper and other industrial minerals in 2007.
Rio's acquisition of Canada's Alcan for $38 billion in November made aluminum output the biggest gainer for the year, though with much of what the world's third biggest mining company digs shipped to a booming China, production records were also set in iron ore, bauxite, alumina, gold and refined copper.
"We are driving the business at record pace, as these numbers clearly show," Rio Chief Executive Tom Albanese said in a statement accompanying the firm's fourth quarter production report on Wednesday.
!ADVERTISEMENT!BHP <BLT.L> Chief Executive Marius Kloppers has argued that a marriage with Rio would streamline mining operations at a time of high demand for raw materials and would assemble a more efficient supply chain to customers, many of which buy from both companies.
Rio has rejected the three-for-one share swap proposal, worth some $139 billion when announced in November, saying it is happy to ride the boom in mineral commodities on its own.
Analysts said the robust activity at its mines sets Rio on course to meet profit forecasts of around $7 billion in 2007, though production still appeared restrained due to limits on shipping in some locations.
"The big thing with the diversified (miners) such as Rio has been infrastructure constraints," said Grant Craighead, mining analyst with Stock Resources in Sydney.
"The mines are all there and really are running at the capacity of the ports and railways rather than the capacity of the mines," Craighead said.
CONSTRAINTS
Production at Rio's Australian coal mines continued to be hindered by rail and port constraints that have also led to export quotas being imposed on collieries despite favorable market conditions, Rio said.
While hard coking coal output rose 2 percent in the fourth quarter, production of other coals fell 28 percent, it said.
Fourth quarter refined copper production rose 65 percent, while mined copper declined 14 percent, owing to less rich ore mined from the Kennecott and Northparkes lodes, Rio said.
Rio's 30 percent holding in the Escondida copper mine in Chile, the world's biggest, delivered a 4 percent rise in mined copper in the fourth quarter, though refined metal at the mine dropped 7 percent, figures showed.
Fourth quarter iron ore output increased 11 percent to a record over the same period the previous year, sweeping full year production to 179 million tonnes, it said.
Rio Tinto's profits from its iron ore division may have topped $3 billion in 2007, maintaining its ranking as the company's second-largest income getter after copper, according to analysts' forecasts.
Analysts predict that the prices mining companies charge steel mills for iron ore will rise by 50 percent or more in the next shipping year starting April 1, 2008 as Rio moves to lift annual output to 220 million tonnes.
Fourth quarter aluminum production was up 287 percent, including additional production of 618,000 tonnes from Alcan.
BHP, which reports quarterly production January 23, has until February 6 to make a formal offer for Rio, or walk away under a deadline imposed by the U.K.'s Takeover Panel.
Rio shares closed down 2.95 percent on Wednesday in a broader market down 2.5 percent.
(Editing by Jonathan Standing)
