(Repeats story published late Friday; no changes to text)
* Expects to deliver 240 million T iron ore to China in 2015
* Rio’s 2015 production costs down $ 2 from 2014 levels
* Keeping close eye on impact of China’s currency devaluation
SHANGHAI, Aug 21 (Reuters) – Australian mining giant Rio Tinto expects to deliver 240 million tonnes of iron ore to China this year, up from 200 million tonnes in 2014, the company’s China managing director told reporters on Friday.
The miner has driven down its production costs to $ 16.20 a tonne this year, $ 2 lower than a year ago, enabling it to cope with falling prices of the steelmaking raw material, Ren Binyan said at a press briefing.
Global iron ore prices have collapsed as a result of slowing demand growth in top consumer China and a concerted output expansion by giant miners, including Rio Tinto (LSE: RIO.L – news) , its Australian rival BHP Billiton (NYSE: BBL – news) and Brazil’s Vale.
Spot iron ore prices have lost more than 20 percent in 2015 as an economic slowdown in China curtailed the country’s use of steel. The outlook for the raw material remains grim for the rest of the year as well.
China’s steel consumption is expected to fall further this year, after it dropped 3.4 percent in 2014 – the first decline since 1981. Also, the top global miners aim to further bring down costs and expand production to back their battle to maintain market share in China.
The efforts have enabled the big three to drive out higher-cost producers in China and elsewhere and expand their market share. Australia and Brazil accounted for 84.6 percent of China’s total imports in July, data shows.
Rio is aiming to raise full-year output by 15 percent to 340 million tonnes from 2014, but it has reset its capital spending reduction target to $ 1 billion this year from $ 750 million earlier to cope with weak conditions.
Globally in iron ore, about 120 million tonnes of unprofitable mining capacity is expected to close this year, with 80 million tonnes coming from China’s higher-cost operators, the miner said earlier this month.
Ren said Rio Tinto was keeping a close eye on the impact of China’s currency devaluation on iron ore demand, but said the rise in the U.S (Other OTC: UBGXF – news) . dollar was positive for the company. (Reporting by Ruby Lian and David Stanway; Editing by Himani Sarkar)
