Rio Tinto’s Oct-Dec hard coking coal output drops

OREANDA-NEWS. UK-Australian mining firm Rio Tinto posted a steep drop in hard coking coal production for the October-December quarter, dragging output lower overall for 2014 as the company prioritised thermal coal output at its Queensland mines.

Hard coking coal production in Australia fell by 28pc to 1.64mn t during October-December from 2.41mn t in the same period in 2013. This led to an 8pc fall in 2014 output to 7.05mn t.

The lower production was because of Rio Tinto's Hail Creek coking and thermal coal mine in the Bowen basin in Queensland concentrating on extracting more thermal coal than coking coal. Prevailing coal prices have seen sharp falls in both grades last year because of slowing demand growth for coking and thermal coal, while global production growth has outpaced demand.

Hard coking coal production from Hail Creek dropped to 5.32mn t in 2014 from 5.61mn t in 2013. Output from Rio Tinto's Kestrel mine, also in the Bowen basin, dropped to 1.73mn t last year from 2.04mn t in 2013.

Semi-soft coking coal production in Australia fell by 21pc to 728,000t during October-December from the same period in 2013. This led to a 17pc decline in production to 3.21mn t in 2014 from the previous year. All of the company's semi-soft coking coal production comes from its coal mines in New South Wales, including Mount Thorley that it has a 64pc stake in and the Warkworth mine of which it owns 40pc.

Rio Tinto completed the sale of its Mozambique coal assets on 8 October last year, which led to a loss of almost all of the \$4bn it paid for the assets in 2011. The sale meant that production comparisons with a full-year contribution in 2013 do not reflect a like for like basis. It reported hard coking coal production of 416,000t in Mozambique from 2014, down by 26pc from 2013 levels.