Rio Tinto's copper output slumps on Chile strike

Mining giant Rio Tinto reported a plunge in its copper output on Thursday as a strike in Chile and Indonesian regulatory changes hit production.

In a quarterly report, the world's second-biggest miner said copper output slumped 37 percent in the first quarter compared with the same period last year to 84.2 thousand tonnes, adding it had cut its production forecast for the year.

It cited a 43-day strike at the world's largest copper mine -- BHP Billiton's Escondida in Chile where Rio has a 30 percent interest -- as among reasons for the fall, having "adversely impacted" production.

The strike ended on March 24 but production was only expected to reach normal levels by July, the Anglo-Australian firm said.

Also causing a headache for the miner was a controversial U-turn on mineral exports policy in Indonesia.

Regulations introduced in January to relax a ban on shipments of raw mineral ores triggered a standoff with US miner Freeport-McMoRan, halting shipments at its vast copper and gold mine Grasberg, in which Rio has a stake.

Rio reported zero output from Grasberg in the January-March period this year, saying the new rules "may have a significant impact on its share of production in 2017".

The miner indicated its future involvement in Grasberg was under consideration, with "participation beyond 2021" potentially affected.

Under the joint venture, Rio has rights to a 40 percent share of production above certain levels until 2021 and 40 percent of all production after 2021.

Productions levels for iron ore -- Rio's main commodity -- also slipped three percent to 77.2 million tonnes from the first quarter last year after "significant weather disruptions" in Western Australia's Pilbara region, Rio said.

A surge in commodity prices -- including iron ore -- after a slump helped the miner turnaround a 2015 loss into an annual net profit of US$4.62 billion last year, Rio reported in February.

source: AFP