Rio Tinto mined more than 50 million tonnes of iron ore, or a quarter of its total output this year, from a single mine in Western Australia for the first time as demand for the raw material recovered.
The Yandicoogina mine in the Pilbara, one of a handful worked by Rio Tinto, achieved the figure after operating at about a 40 million tonnes a year rate until April, the company said today.
Rio Tinto, along with fellow Australian iron ore miners including BHP Billiton and Fortescue Metals Group, are racing to dig mines as steel mills across Asia increase production.
Rio Tinto, which sells about half its iron ore at spot market prices and the rest on agreed annual contracts, expects year-end figures to show it produced between 210-215 million tonnes in 2009, up from 170 million tonnes in 2008.
Spot iron ore prices have been on an upward trajectory since mid-October to the current price of around $US110 a tonne, cfr China, meaning the seller is responsible for paying for shipping, while the buyer is responsible for transportation risk as soon as the ore is loaded onto the ship.
Contract prices, which recoiled between 33 per cent and 44 per cent in the current shipping year, are forecast to rise by as much as a third after next year as weak demand that swept through the sector decimating industrial activity abates.
BHP is targeting a 31 per cent rise in iron or output to 205 million tonnes by 2011. Fortescue is aiming to lift annual production to 45 million tonnes from 38 million this year.
Smaller miners Atlas Mining and BC Iron are also planning incremental production increases.
Source: Reuters
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