CDV Investments: Rio Tinto blames heavy rains for dampening quarterly coal and iron ore output.

April 13, 2011 - PRLog -- CDV Investments has been informed that the severe weather in Australia which disrupted mining and hampered port and rail operations has been blamed by Rio Tinto for the drop in first quarter output of iron ore and coking coal.

Iron ore production dropped 16% from 50.1 million metric tons in the last quarter of 2010 to 41.9 million metric tons in the three months ending March 31 according to the London-based firm. This is still higher than the UBS AG estimate of 46.9 million metric tons. Hard coking coal output dropped 29% to 1.6 million metric tons over the same period.

The unusually heavy rains and cyclones in Western Australia and Queensland dramatically affected mining operations and delayed shipments from the country, the globe’s largest exporter of iron ore and coal.

CDV Investments has learned that Rio Tinto CEO Tom Albanese is looking at expanding the firms iron ore operations, the company’s biggest contributor to earnings, by 50% by 2015 at a cost of around $14.8 billion.

“Our Australian coal, iron ore, uranium and alumina operations were affected by the extreme weather in the first quarter,” CDV Investments believes Albanese said in a recent statement. “Most are recovering and are benefiting from continued strong prices.”

The mining house said it expected to produce 191 million tons of iron or in 2011, compared to 184 million tons in 2010.
Macquarie Group Ltd says that iron ore prices may well increase by 125 this year, on top of last year’s 84% gains.

# # #

CDV Investments is an independent brokerage firm providing bespoke market insights and investment strategies to hedge funds, corporate and institutional investors, high net worth individuals and private clients.