The mining giant said production of coking coal was severely impacted by ongoing port constraints and reduced tonnage allotments in Queensland, which curtailed mined production, despite generally favourable market conditions.

In NSW, reduced port throughput from coal chain infrastructure limitations continued to impact all sites, offsetting a recovery in production at Rio Tinto subsidiary Coal & Allied, following heavy rains and the declaration of force majeure in June.

Rio said it expected the congestion to ease at Newcastle and Dalrymple Bay ports by the second half of 2008 and into 2009 as increased capacity comes on board.

During the third quarter Rio's Australian mines produced 1.56 million tonnes of hard coking coal and 5.85Mt of other coal.

In the US, 31Mt of thermal coal was produced as coal inventories at power utilities increased following lower demand for power combined with strong shipments at the end of 2006.

It said its Spring Creek mine set a new quarterly record following an expansion project.

During the first nine months of this year Rio spent $US348 million on exploration and evaluation.

Advanced coal projects included under this spend were Huren Gol coal, Mongolia and Landazuri coal, Colombia where coal measures were intersected in drilling. Greenfield programs were undertaken in Colombia, Canada, the US, southern Africa and Mongolia.