Increased copper production, higher copper prices and the acquisition of the Metal Goods division helped Rio Algom (TSE) post solid revenue and earnings figures for the second quarter.
The company earned $34.6 million (or 66 cents a share) on revenue of $592.1 million, compared with $17 million (or 33 cents a share) on $283.5 million in same period last year.
Copper production rose to 48 million from 33.6 million lb., largely as a result of additional production from the Cerro Colorado mine in northern Chile.
Since operations began last February, Cerro Corona has yielded more than 38 million lb. of LME grade A copper cathode. On a year-to-date basis, this represents 87% of the planned rate. The shortfall was attributed to high clay content in the orebody. However, steps are being taken to rectify this problem, and the company anticipates production improvements will be made by the fall. With reserves of 193 million tonnes averaging 1.08% copper, Rio expects the project will have a mine life of more than 20 years at an output rate of 130 million lb. per year.
Revenue was bolstered by the purchase of the Metals Goods business. Indeed, quarterly revenue for the metals distribution division almost tripled, compared with figures of a year ago.
Strong second-quarter results led to a much-improved first half for Rio. For the first six months, earnings almost tripled to $70.7 million (or $1.36 a share) on revenue of $985.8 million. This compares with $24 million (or 48 cents a share) on $535.6 million in the same period last year.
In addition to copper, Rio produces uranium, molybdenum and coal.
In the second quarter, uranium output rose to 565,000 lb., up from 514,000 lb. in the previous second quarter. Molybdenum production fell, however, dropping to 269,000 from 328,000 lb., as did coal, which fell to 127,000 tonnes.
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