MONTREAL - Rio Tinto expects to complete the second-phase expansion at its majority-owned Iron Ore Company of Canada by mid-2014.
The expansion of the facility in Newfoundland and Labrador will increase concentrate production capacity by six per cent to 23.3 million tonnes a year.
Analysts expect that up to $70 million in additional spending will be required to complete the project, owned 58.7 per cent by Rio Tinto.
The facility's output in the third quarter beat expectations and is up 12 per cent so far this year. Production was four million tonnes, including 1.8 million tonnes of concentrate and 2.2 million tonnes of pellets.
Sales were 3.8 million tonnes, down from 4.8 million tonnes in the prior quarter due interruptions caused by wildfires, harder ore in the pit and scheduled maintenance downtime.
Concentrate sales this year are up 60 per cent from the first nine months of 2012 due to recent expansions and the decision to curtail pellet output to reduce costs.
Overall, Rio Tinto (NYSE:RIO) said Tuesday that quarterly global production of iron ore, copper and aluminum were higher, but output was down from its Diavik diamond operation in the Northwest Territories.
CEO Sam Walsh said the company is making progress in achieving its strategic priorities.
"We are also making further important gains in productivity across our operations and continue to drive costs out of the business," he said in a statement.
Global ore production and shipments reached a record in the quarter, with output rising four per cent to 68.3 million tonnes, including 64.3 million in Australia. Rio's share was 51.1 million tonnes. The company still expects its ore partnerships will produce about 265 million tonnes of ore this year in Australian and Canada.
Rio's share of copper production grew 23 per cent to 162,300 tonnes while aluminum output for remaining facilities was up nine per cent to 878,000 tonnes. Production was impacted last year by the lockout at Alma, Que., that ended in July.
The first aluminum from its AP60 plant in Quebec was produced in the quarter. Once fully commissioned, the 60,000 tonnes per year plant will produce 40 per cent more aluminum per cell than the previous generation of technology.
Its diamond production in Australia increased 26 per cent to 3.8 million carats, but output in Diavik decreased 13 per cent from last year to one million carats due to lower grades of ore.
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