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Rio hits record iron ore numbers


Global miner Rio Tinto has achieved record first half iron ore production and sales, despite a slump in global economic conditions.

First half iron ore production of 120 million tonnes and shipments of 115 million tonnes were both four per cent higher than the first half of 2011.

Iron ore production for the quarter totalled 62 million tonnes, in line with the second quarter of 2011.

Mined copper production was five per cent higher than the second quarter of 2011, primarily driven by processing efficiencies and higher copper grades at Escondida.

Rio Tinto's share of production excluding partners for the half was 94 million tonnes and 48.63 million tonnes for the quarter, with the latter slightly down on last year's figure of 48.85 million tonnes.

Chief executive Tom Albanese described the second quarter result as strong across most of the portfolio, with production in bauxite, alumina, coking coal and titanium dioxide production all higher than in the second quarter of 2011.

"Global economic conditions and sentiment dropped markedly in the second quarter," he said in a statement.

"We are keeping a close eye on the pace of the US recovery, the continuing eurozone crisis and the impact of efforts to stimulate the Chinese economy on the markets that we serve.

"Our investment program remains resilient to this market volatility, as our tier one projects are robust under any probable macroeconomic scenario."

Iron ore prices have plunged to current levels of slightly above $US130 ($A127.29) a tonne from a record $US180 ($A176.25) last year but are still at historic highs with strong margins.

During the quarter, Rio Tinto announced further investments to expand its Pilbara iron ore business to 353 million tonnes per annum and to progress further the Simandou iron ore project in Guinea.

Rio is the second largest iron ore producer in the world.

Iron ore is estimated to comprise as much as 80 per cent of Rio's earnings this year and is still considered profitable at current prices.

Bauxite and alumina production were eight per cent and five per cent higher than the second quarter of 2011 but prices and demand in that industry is weaker due to oversupply.

Aluminium was 12 per cent lower than the second quarter of 2011, mostly due to the shutdown of two-thirds of capacity at its Alma refinery in Canada, following an industrial dispute with workers that has now been resolved.

The Yarwun 2 alumina refinery expansion in Queensland was completed during the quarter with first commercial production expected in the third quarter of 2012.

Hard coking coal production was 13 per cent higher than the second quarter of 2011, and thermal coal production was flat compared with the second quarter in 2011.

In June 2012, Rio Tinto announced the first shipment of premium hard coking coal from its Benga Mine in Mozambique, which it acquired through its takeover last year of Riversdale.

Rio shares were weaker, down four cents at $54.29, at 1605 AEST.