Rio Tinto Production Declines; African Petroleum Raises $250 Million

Marcus Jacob
13 Apr, 2011
New York City

Australian stocks rebounded after a selloff in the previous session. Rio Tinto said its production of iron ore, alumina and copper declined in the first quarter to March on inclement weather in Pilbara region. African Petroleum completed the $250 million offering.

[R]5:00 PM Sydney – Australian stocks rebounded after a selloff in the previous session. Rio Tinto said its production of iron ore, alumina and copper declined in the first quarter to March on inclement weather in Pilbara region. African Petroleum completed the $250 million offering.[/R]

Stocks in Sydney recovered from a weak opening and closed higher tracking gains in Asian markets.

The ASX 200 index increased 12.30 to 4,911 and All Ordinaries increased 9.4 to 4,999.60.

Rio Tinto Iron Ore Output Falls

Rio Tinto said its global output of iron ore declined 3% to 42 million tons in the first quarter to March on heavy rains and three tropical cyclones in Pilbara region.

In the current year the company expects the output to rise to 191 million tons from 184.6 million tons last year from its mines in Australia and Canada.

The mining giant also said coking coal production declined 12% in the quarter but is estimated to increase to 9.3 million tons from 9 million tons in 2010. Thermal coal production is expected to fall to 18.2 million from 18.4 million tons in 2010.

Alumina production declined 4% in the quarter and aluminum production was flat. Rio estimate annual alumina production to increase to 9.4 million from 9.1 in 2010 and aluminum production to inch up 3.9 million tons from3.8 million tons in 2010.

Stock Movers

Rio Tinto declined 1.5% to $85.71 after the coal miner reported 3% drop in iron ore production in the quarter to March and production declines in coal, copper and alumina.

BHP Billiton declined 31 cents to $48.58 ahead of production report after Rio Tinto and Fortescue Metals indicated lower output in the Pilbara region.

Energy Resources plunged 11% or 84 cents to $6.88 after uranium miner said current year earnings will lag the last year earnings.

Oil Search Ltd dropped 1.9% or 14 cents to $7.31 and Santos declined 19 cents to $15.55. Woodside Petroleum eased 21 cents to $46.62.

African Petroleum completed the fund raising of $250 million at 2% discount to its $1.02 share price on Monday after it was placed on a trading halt.

The company’s capital raising is the largest on the National Stock Exchange and plans to drill its first off shore well in June at its oil block in Liberia. The largest independent oil company in Africa has also interests in Gambia and Sierra Leone.

Airlines traded higher after crude oil prices declined. Qantas Airways and Virgin Blue increased more than 3%.

Goodman Group increased 71 cents after the company said as a part of a consortium the company has offered to acquire ProLogis European Properties FCP with a market capitalization of 1 billion euros.

Westpac added 1.5% to $24.90 and Commonwealth Bank increased 0.7% to $52.89 and Macquarie Group gained 1.7% to $35.09.