Rio Tinto stock hit despite its bullish update

ANGLO-AUSTRALIAN miner Rio Tinto brushed off fears of a global economic crisis yesterday, reporting record iron ore sales and a five per cent jump in output for the third quarter – but its London shares still tumbled on fears over the Chinese economy.

“We are operating at full capacity, selling all we produce and our growth programme is on track, supported by the strength of our balance sheet,” chief executive Tom Albanese said in the company’s quarterly production report.

“Whilst we are mindful of current market volatility, the fundamentals are holding up well, particularly for bulk-traded commodities,” he said.

Rio Tinto, second to rival Vale in iron ore output, maintained its 2011 forecast for record production of more than 240m tonnes and said third-quarter output had jumped five per cent to 64m tonnes.

But Rio Tinto’s shares in London lost 2.33 per cent to close at £32.84, after gloomy trade data from China hit confidence in mining stocks, the UK sector slipping by 3.1 per cent.

Rio Tinto’s bullish stance comes as spot iron ore prices trade at their lowest levels since November 2010 on slower demand from China owing to weak steel prices.