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Rio energy faces headwinds: Fat Prophets

THE commodities in Rio Tinto's energy group - thermal and coking coal as well as uranium - contin...

Lou Caruana
Rio energy faces headwinds: Fat Prophets

Thermal coal reported a fall in June quarter production of 3.7% on the same quarter for 2013, to 5.8 million tonnes, reflecting the tougher market environment, Fat Prophets said.

“Softer third-party demand and the sale of the Clermont mine during the reported quarter drove the result,” it said.

“The Clermont mine sale will remove approximately nine million to ten million tonnes of thermal coal from annual production.

“Thermal coal operations in Australian experienced a fall of 5.2% on the corresponding quarter in 2013, to 5.2 million tonnes.”

Thermal coal production guidance for 2014 has been upgraded to 17.5Mt.

Coking coal production which is used in steel manufacturing was higher by 5.9% on the same quarter in 2013, at 2.0Mt. Upgrading of infrastructure at the company’s Kestrel mine was behind the result, Fat Prophets said.

Guidance for hard coking coal production for 2014 was marginally downgraded to 7.4Mt (previously 8.2Mt).

Rio Tinto’s uranium operation again turned in another poor performance for the quarter, Fat Prophets said.

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