Rio Tinto Shares Drop as Iron and Copper Ore Production Tumbles

Shares in Rio Tinto fell in early London trading after the miner reported an 11 percent drop in iron and copper ore production in its first quarter, claiming severe weather disruptions.

The world's second biggest producer of iron ore and a major supplier to the China announced that its share of production from mines it owns outright and in joint ventures dropped from 51.2 million tonnes in the previous quarter to 45.6 million tonnes, 4.4m million tonnes less than analyst expectations.

Rio Tinto shares were trading 0.5 percent lower, at 3,422 pence, by mid-morning in London. Shares have advanced around 9.5 percent so far this year against a 2.3 percent gain for the benchmark FTSE 100.

Iron ore production dropped six million tonnes to 59 million tonnes, while mined copper output decreased by 13 percent to 119,500 tonnes, 20,500 tonnes less than forecast.

The group's Paraburdoo mines were struck by heavy rain and two cyclones, with extreme weather disrupting freighter movements from Dampier and Cape Lambert, from which it ships its Australian ore.

The slow quarter will exacerbate the London and Melbourne based group's concerns that a slowdown in growth in China will see a corresponding tail off in commodity imports. China is the single largest buyer of Australian iron ore.

Chief executive Tom Albanese described the group's first quarter performance as "solid", claiming increased production of iron ore, coal, bauxite, alumina and titanium oxide compared with the first quarter of 2011.

He said: "This was driven by a combination of our consistently high operating performance and reduced impact from severe weather than in 2011.

"We were therefore well positioned for the relatively strong markets in the first quarter, albeit with continued volatility as we anticipated."

The London and Melbourne based group will share concerns that a slowdown in growth in China will see a corresponding tail off in commodity imports. China is the single largest buyer of Australian iron ore.