Two of the world's leading diversified mining firms posted record production levels for their Australian operations, despite a demonstrable slowdown in the country's resources sector.
Rio Tinto has hit new heights for iron ore production, shipments and rail volumes, with production for the June quarter gaining 7 per cent year on year to reach 66 million tonnes. Chief executive Sam Walsh see annual capacity this year reaching its target of 290 million tonnes.
Just a decade ago, prior to China’s swift economic ascendance, Rio’s annual output of iron ore was only 100 million tonnes. The group currently hopes to hit 360 million tonnes of output per year by 2015, although this goal has yet to be confirmed.
The company’s record output for iron ore was achieved despite mechanical issues with equipment and a spate of inclement weather in the Pilbara region of Western Australia.
BHP also achieved groundbreaking output levels at its iron ore operations in the Pilbara, exceeding market forecasts and logging its 13 consecutive consecutive production record for the year ended in June.
Iron ore production for the year gained 7 per cent to stop just shy of 170 million tonnes, while production in the June quarter alone was 17 per cent higher than the same period last year.
The group currently has ambitions of achieving an output capacity of 220 million tonnes per annum by 2016. Only a decade ago its production per year was a mere third that amount at 73.7 million tonnes.
Rio and BHP have reached these record production levels despite tepid spot prices for iron ore, ailing growth in chief export market China, and the vindication of long-standing reports of an end to the Australia mining boom by declining levels of investment in fresh projects.
Both Rio and BHP have cut costs, divested themselves of surplus assets and temporarily shelved new developments in response to this harsher market environment.
The two mining giants are nonetheless forging ahead with expansions to iron ore production levels, triggering concerns that their supply increases could put further pressure on spot prices which have already faltered.