Shares of diversified mining giant, Rio Tinto Limited (ASX: RIO), traded over 2% higher today following the release of its quarterly production report this morning.
In an announcement to the ASX, Rio Tinto CEO Sam Walsh said the miner continues to prioritise efficiency gains in the face of tough market conditions.
"We continue to drive efficiency in all aspects of our business, which is reflected in our solid production performance during the first quarter," Mr Walsh said. "By making best use of our high quality assets, low cost base and operating and commercial capability our aim is to protect our margins in the face of declining prices and maximise returns for shareholders throughout the cycle."
Here are five things all shareholders need to know about Rio's first quarter of financial year 2015.
- Global Iron ore shipments (on a 100% ownership basis) totalled 72.5 million tonnes, up 9% over the prior corresponding period in 2014.
- Total bauxite – the main source of aluminium – production was 10.484 million tonnes, up 4% over the pcp.
- Aluminium production was flat at 809,000 tonnes as increased capacity across the smelter portfolio offset lower production at Kitimat.
- Hard Coking Coal – mainly used in steel production – was the best-performing commodity group (on a percentage basis), with production climbing 10% to around 2 million tonnes.
- 2015 iron ore production guidance was confirmed at 350 million tonnes.
Should you buy Rio Tinto shares?
Rio shares have climbed strongly today on the back of this good – but not great – production result.
Whilst the miner boasts some of the lowest production costs in the world across a multitude of its commodity groups, long-term investors are reminded of the gloomy outlook for a number of its products.
Indeed with China's unprecedented infrastructure boom grinding to a halt the prices of many commodities (including iron ore – Rio's most lucrative commodity) are likely to remain under pressure.