FTSE 100 company Rio Tinto’s CEO said yesterday that operations had achieved a “solid performance” in the first quarter, despite a drop in copper production.
The mining giant reported “record first quarter iron ore production” but said that structural damages to its Kennecott Utah Copper mine meant that refined copper production in 2013 would be around 100,000 tonnes less than had been anticipated.
Chief executive Sam Walsh, who replaced Tom Albanese earlier this year, said that cost cutting measures had been put in place. “We are making good progress in achieving our cost reduction targets and other priorities for 2013, and are determined in our pursuit of greater value for shareholders,” he said.
The company added that it plans to launch commercial production from a copper-gold mine in Mongolia by the end of June, subject to talks with the country’s government.
While there was no revenue or profit disclosure in yesterday’s announcement, broker Killik & Co said that it expected the adjustment in copper production to lead to mid-single-digit downgrades in Rio Tinto’s revenues but the key commodity for the mining giant is iron ore.
The group’s “very robust” financial position gives it flexibility to invest in the business and maintain a progressive dividend policy, added the note.