The shares of Rio Tinto (LSE: RIO) (NYSE: RIO.US) rallied 61p to 2,867p during early trade this morning after the miner issued an operations update for its second quarter.
The FTSE 100 member confirmed its iron ore production during April, May and June had advanced 7% to 66 million tonnes. The performance took Rio’s first-half iron ore production to 127 million tonnes, some 6% ahead of the first half of 2012.
Rio confirmed the quarterly iron ore production was a record and was achieved despite a side-lined ship loader and flooding at the group’s Pilbara mine in Australia.
Rio also said its share of copper production during the quarter had improved by 10% to 146,000 tonnes, while aluminium had gained 7% to 901,000 tonnes and hard coking coal had dropped 5% to 1.9 million tonnes.
Rio Tinto’s chief executive, Sam Walsh, said:
“Our iron ore operations continue their impressive performance, with period-on-period productivity improvements. One of our key priorities this year is to deliver our growth projects. Despite some challenging weather conditions, our Pilbara 290 iron ore expansion remains on track to deliver first tonnes by the end of this quarter.“
Mr Walsh added that iron ore production for 2013 as a whole should be 265 million tonnes.
Prior to today, mining analysts expected Rio’s annual earnings to remain around the $5 per share mark, which would put the shares on a P/E multiple of less than 9.
In addition, last year’s $1.67 dividend currently supports a 3.9% income.
Of course, whether Rio’s share-price valuation and today’s operations statement combine to make the miner’s stock a ‘buy’ remains something only you can decide.
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> Maynard does not own any share mentioned in this article.
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