Rio Tinto’s 75% owned NSW coal arm, Coal and Allied, revealed rise in production and a rise in sales for the March quarter as the company rode out fluctuating demand and the impact of the March 11 quake and tsunami on the economy of its largest export market, Japan.
Coal & Allied Industries, which is the country’s biggest thermal coal producer, said in its March quarter review that the Japanese disasters would mean soft demand for the next six months.
But it said that any fall in demand from Japan will be made up by consumers elsewhere in Asia.
"Whilst there will be some reduction overall in demand from Japan over the next six to twelve months, the overall demand position is likely to be offset by increased demand in other regions in Asia," the company told the market
"The devastating impacts of the earthquake and tsunami in Japan have impacted coal-fired power stations and general industry north of Tokyo and on the country’s east coast.
"Some of our customers have been affected and we continue to work with those customers to reschedule vessels and to help manage supply in the future."
Coal and Allied said that its share of first-quarter coal production rose 9.8% year-on-year, to 4.6 million tonnes from 4.2 million tonnes, while its share of sales climbed 22% to 4.8 million tonnes from 3.9 million tonnes.
However, rainfall in recent months and mining problems meant attributable production fell 18% in the 4th quarter of 2010, when 5.7 million tonnes were mined, while sales dropped 11.7% from 5.4 million tonnes.
The company said full-year saleable production would be maintained around 5-10% above the 2010 level, when 18.8 million tonnes was produced.
Coal & Allied said it spent $5.1 million on exploration and evaluation related activities during the quarter.
This was predominantly related to the Mount Pleasant project feasibility study that is now well underway.
The shares ended down a marginal 84c at 4123.26.
