POOR weather conditions, the carry over of operational issues from 2003 and the disposal of non-core assets adversely affected Rio Tinto's first quarter across the board production.

Coking coal has become a more significant product for Rio Tinto in the past year, just in time to capitalize on high Japanese contract prices.

A 15 year contract to supply 30 million tonnes from the Hail Creek mine to Nippon Steel, signed in April, certainly hasn’t hurt Rio Tinto foray into the coking coal market.

The new Hail Creek coking coal mine has continued to ramp up towards its initial capacity of 5.5 million tons.

Rio Tinto Australia produced 1.2 million tonnes of hard coking coal during the first quarter, up significantly on the 2003 comparable quarter and the previous quarter. This was mainly due to the introduction of Hail Creek production.

Thermal, semi-soft and semi hard coking coal posted almost four million tonnes for the quarter.

On the negative side, sales from Blair Athol were constrained during the first quarter because of the Dalrymple Bay Coal Terminal incident, which reduced throughput for seven weeks.

Coal & Allied sales through the port of Newcastle continued to be affected by port and rain congestion with demurrage charges averaging over $US2 per tonne.