Rio warns sanctions could hit production
RIO Tinto has warned it may need to cut its aluminium production forecast because of US sanctions targeting Russia.
The miner has become embroiled in the increasing testy relationship between the US and Russia that resulted in America targeting key Russian companies and business figures earlier this month.
Russian aluminium producer Rusal owns 20 per cent of Rio’s aluminium refinery in Queensland and is also a major buyer of the Anglo-Australian miner’s alumina and bauxite.
Rio had previously advised investors it expected to produce 3.5 million to 3.7 million tonnes of aluminium this year.
In a quarterly production update yesterday it said that projection would be adjusted following the sale of two smelters in France and Iceland earlier this year. It also warned it may need to make further cuts to its production forecast due to the US sanctions.
Aluminium production dropped 5 per cent to 800,000 tonnes during the three months to March compared with the same period a year earlier as Rio’s operations in Canada were disrupted by industrial unrest. In iron ore, Rio’s biggest earner, the mining titan increased production at its Pilbara operations by 8 per cent to 83.1 million tonnes during the quarter. It shipped out 80.3 million tonnes as it built up its stockpiles.
Rio shares rallied 87¢ to $78.96 yesterday.