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Rio Tinto posts record iron ore production in Q2

Global miner Rio Tinto Ltd has boosted its iron ore production to record levels, after fighting back from a cyclone affected first quarter to take full advantage of a recent iron ore price hike.

The miner produced 33.32 million tonnes of iron ore in the second quarter, up four per cent on the previous corresponding period.

The record iron ore output was 16 per cent higher than in the first quarter, when cyclones and heavy rain hampered production in the Pilbara in Western Australia and obliged Rio Tinto to declare force majeure on contracts it could not fulfil.

After protracted negotiations, iron ore miners this year won a 19 per cent price hike from steel mills, with the new price to be backpaid to April 1.

Rio Tinto's strong recovery from the first quarter ensures it will be able to take full advantage of that price hike, with most analysts now predicting a half year profit in the region of $US3.5 billion ($A4.7 billion).

ABN Amro mining analyst Rob Clifford said the iron ore production figures were better than he expected, with the company staging a good recovery at the same time as it worked on its $1.77 billion Pilbara expansion.

"When you are trying to run at 110 per cent and expand at the same time you can trip up on your own bootlaces, so they did do better than I expected," he said.

But UBS head of resources research Glyn Lawcock said the iron ore result was a little below what he had been forecasting.

"It was obviously still weather affected and we would look for a much stronger second half," he said.

The Anglo-Australian giant also mined 207,400 tonnes of copper during the quarter, up nine per cent on the same period last year, and refined 83,900 tonnes of copper, a gain of up 35 per cent.

Rio Tinto said the increase was due to higher grades at its Kennecott operations in the US and higher production at Escondida in Chile.

At Kennecott the miner continued to give up some copper production to maximise molybdenum production as it moved to take advantage of soaring prices.

Alumina production rose 10 per cent on the previous corresponding period with a strong performance from the Comalco Alumina Refinery, which contributed a record 322,000 tonnes.

Dr Lawcock said company was running "flat out" to maximise its production across its operations.

One of the few disappointments, he said, was coking coal exports, with production down 21 per cent on the second quarter of last year.

In its production report, Rio Tinto again noted the weaker demand for coking coal was due to consumers relying on inventories they had built up.

Dr Lawcock said the uranium figures had also been "a shocker" with production down 34 per cent on the previous corresponding period as heavy rains and a cyclone hit production at the Ranger mine.

Mr Clifford said overall the miner's production figures were "pretty solid" and it was continuing to do all it could to milk soaring commodity prices.

"I don't think there is anything they would have done different this quarter if prices had been double what they are," he said.

"They are just trying to squeeze every last ounce of what they are making out."

Rio Tinto closed down five cents at $72.45.

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