China helps Rio lift iron output 49 per cent

MELBOURNE - Rio Tinto, the world's third-largest mining company, said fourth-quarter iron ore output rose 49 per cent after Chinese steel mills bought record volumes.

Production was 47.2 million metric tonnes in the three months ended December 31, from 31.8 million tonnes a year earlier, Rio said yesterday.

China increased purchases 42 per cent to a record last year, driving cash prices to the highest in more than a year. Steel and ore prices are rebounding as the global economy emerges from recession.

"They are going to try and pump out as much iron ore as they can in a pretty buoyant environment," said Ric Ronge, who helps manage US$1.1 billion ($1.5 billion) at Pengana Capital in Melbourne including Rio Tinto stock, said. "Of the big players, Rio is very well placed in terms of volumes and pricing."

- BLOOMBERG