As coal prices soar – especially coking coal – Rio’s performance was hampered by the flooding in Queensland, which saw the miner declare force majeure from its Hail Creek operations for five weeks in February and March.

As a result, the company’s coking coal production was down considerably for the three months to March, dropping from 1.54 million tonnes in the December quarter last year to 1.04Mt in the March quarter.

Production at Rio Tinto subsidiary Coal & Allied's Hunter Valley operations was limited by constraints in the Hunter Valley coal chain, with thermal coal production falling to 2.14Mt, from 2.3Mt in the first quarter of 2007.

Rio’s other Australian coal production also fell to 5.7Mt for the period, down from 7.04Mt in the first quarter of last year but up marginally from the December quarter.

The company’s US coal assets also reported declining production of 30.6Mt, down from 33.4Mt in the last quarter, but roughly steady year-on-year.

Rio chief executive Tom Albanese said in a statement yesterday that demand for the miner’s commodities, including coal, was running hot.

“Markets remain very strong and the prices of many of our products are at record highs, bearing our view that the US slowdown will have little effect on global metal and mineral supply and demand balances,” he said.

Attention will now turn to Rio’s financial results for the quarter, along with BHP Billiton’s production statistics, due out later this month, as Rio fends off a takeover bid from its fellow Australian and major rival.

Rio has been arguing that neither the company, nor its shareholders, need BHP’s takeover offer at its current price.

Shares in Rio ended Wednesday up $A2.49 to $140.60 after hitting a high of $142.15 in intra-day trading.