INTERNATIONAL COAL NEWS

UBS tips higher output for Rio

UBS Investment Research has released its June quarter predictions for Rio Tinto, ahead of the rel...

Kristie Batten

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“We expect Rio Tinto's Queensland coal and West Australian iron ore operations to show improved production quarter-on-quarter following the monsoonal rain impacted March quarter,” UBS said.

UBS has flagged total Pilbara iron ore production of 55 million tonnes, up 10% on the March quarter.

Hamersley iron ore production is estimated to be 7% higher at 36Mt, while Robe River production is tipped to be up 14% to 7.4Mt.

Analysts are estimating Australian coal production to be up 24% on the March quarter to 7.8Mt, with hard coking coal sales expected to be 2.4Mt.

“Risk lies in our coal forecasts following comments today by Rio's subsidiary Coal & Allied that metallurgical coal as a percentage of sales was down due to the Japan earthquake,” UBS said.

UBS is tipping lower copper production due to lower output at Escondida and Grasberg, while uranium output will be impacted by a shutdown at the Ranger uranium mine, owned and operated by Rio’s 68.4%-owned Energy Resources of Australia.

Total copper production is tipped to be 127,500t, down 9.8% on the March quarter, while uranium production is expected to be just over 1 million pounds, down 28%.

Alumina production is expected to higher, while aluminium is tipped to be flat.

UBS maintained a buy rating for Rio and its 12-month price target was also unchanged at $A114.

Shares in Rio were last trading 76c down to $80.19.

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