Rio Tinto Coal Australia’s revenues for 2013 came in at $US4.4 billion ($A4.9 billion), about 10% lower than the $4.9 billion reported in 2012, while net earnings for the year were $367 million – well down on the $402 million for 2012.
Kestrel was the company’s star hard coking coal performer, with its fourth-quarter production soaring 300% on the previous corresponding period with the help of the newly completed $2 billion extension project.
The mine, which produced 608,000 tonnes in the quarter, had its life extended 20 years with the project expansion, which officially opened in October.
Construction work for Kestrel’s mine life extension project started in 2008 and the resulting Kestrel South longwall operation is expected to hit its full capacity by the end of 2014, averaging 5.7 million tonnes per annum of production over the next two decades.
Overall Rio Tinto Coal Australia’s hard coking coal production from its Kestrel and Hail Creek mines was up by 23% to 2.2Mt for the quarter.
Coal recovery work at Hail Creek has been successfully completed following a geotechnical low wall failure experienced in July, Rio said in its quarterly statement.
There were also reduced impacts from maintenance and upgrade stoppages.
Rio Tinto Coal is also haemorrhaging in Mozambique where its annual loss increased from $92 million in 2012 to $142 million in 2013.
Earnings for the energy group as a whole – which includes the company’s uranium operations – came in at $33 million compared with 2012 earnings of $309 million.
“The decline in earnings was primarily due to significantly lower prices and the absence of gains on divestment of exploration properties, which amounted to $258 million in 2012,” Rio Tinto said.
“This was partly offset by a weaker Australian dollar, lower operating costs and record production across a number of sites.
“A transformation program of aggressive cost and productivity improvements continued to deliver results during the year, boosting earnings by $442 million – $646 million pre-tax – compared with 2012.”
Global thermal coal prices continued the weaker trend of the past two years, with the Newcastle index recording a year-on-year fall of 10%, finishing the year on $86 per tonne.
“Excess supply continues to impact the coking coal market with nearly all major exporting countries increasing output in 2013,” the company said.
“This put continued pressure on premium hard coking coal prices in the second half of 2013.”
Australian semi-soft and thermal coal production increased significantly during the year compared with 2012, with four mines achieving annual records.
The increase was delivered through Rio Tinto Energy’s transformation program of productivity improvements, the completion of brownfield mine developments and the ramp-up of the Clermont thermal coal mine, according to Rio Tinto.
Full year Australian hard coking coal volumes were marginally lower than in 2012.
In 2014, Rio Tinto’s share of Australian hard coking, semi soft coking and thermal coal production is expected to be 8.5Mt, 3Mt and 16.5Mt respectively.
