The Kestrel mine in the Bowen Basin reached 1.08Mt of product coal in the September quarter with 907,000 tonnes of hard coking coal and the rest as thermal coal.
The total product coal result was 22% below the 1.39Mt achieved during a solid June quarter but was also 25% up from a year ago.
Rio’s record run in hard coking coal was driven by the Hail Creek open cut mine in the Bowen Basin which produced 2.08Mt of the commodity in the recent quarter.
This figure beat the previous quarter by 16% and the corresponding 2009 period by 14%.
Wet weather in the Hunter Valley of New South Wales had a negative impact on thermal coal production from Rio’s subsidiary Coal & Allied in the September quarter.
Rio’s share of Australian thermal and other coal production was consequently down 14% year on year to 5.16Mt.
Total coal production from Rio’s 60.6%-owned Mount Thorley thermal and semi-soft coking coal mine fell 36% year on year to 618,000t in the recent quarter and was 25% down from the 2010 June quarter.
The shift of production from the Blair Athol mine to its replacement Clermont mine in Queensland is continuing.
Blair Athol scaled production down 20% from the June quarter to 1.77Mt, while Clermont ramped up 111% to 1.12Mt of thermal coal.
Total production from these two mines reached 2.89Mt in September quarter – 4% lower than the output from Blair Athol at full steam in the corresponding period of 2009.
Rio’s share of its various US coal operations produced 11.84Mt in the recent quarter.
This was up 6% from the previous quarter and less than half of the US coal output for corresponding period last year as Rio floated its Cloud Peak Energy business in late 2009.
The mining giant expects its share of hard coking coal production to reach 9.5Mt for 2010.
Rio’s thermal coal output is expected to hit 19.1Mt along with 3.3Mt of semi-soft coking coal.
Project development
While Rio has slated $US400 million of expenditure on the Kestrel Mine Extension project in 2010, most of the $4.2 billion of approved capital projects in the September quarter was for iron ore expansions in the Pilbara.
“We have delivered consistently strong operating performance in 2010 and the third quarter was no exception,” Rio chief executive Tom Albanese said.
“We continue to run our operations at close to or above capacity rates, taking advantage of strong prices for our products.
“This quarter we achieved record production in iron ore, alumina and coking coal. Our investment in organic growth is gathering momentum.”
Albanese said Rio approved $5.5 billion of project development this year, which was consistent with the capex guidance of $13 billion over the 18 months to December 2011.
The KME project aims to lift production capacity from 4 million tonnes per annum to 5.7Mtpa from 2012, extend the mine life to 2031, and increase the longwall face width to 375m.
Rio shares closed up 4.4% or $3.46 to $82.08 yesterday afternoon.
