Australian mining giant
Rio Tinto has announced the downgrading of its estimate for
iron ore shipments in 2008 from the Pilbara region of Western
Australia to between 170 million mt and 175 million mt.
According to a statement issued by
Rio Tinto, the annualized run rate of
iron ore production from the Pilbara mines will be reduced by approximately ten percent as a result of the reduced demand from customers and reduced shipments.
Commenting on the decision,
Rio Tinto chief executive Tom Albanese said, "Operations continue to perform well but demand has continued to decelerate. This reduction is a prudent move to align
production with revised customer delivery requirements in the light of the fourth quarter drop in Chinese demand. We believe this will be a short, sharp slowdown in
China, with demand rebounding over the course of 2009, as the fundamentals of Chinese economic growth remain sound."
This move follows recent decisions by Brazilian mining company
Vale to cut annual
iron ore production by 30 million mt and by
Australia's Fortescue to cut
iron ore production by ten percent on the back of falling demand; however Australian miner
BHP Billiton Ltd has stated it has no plans to roll back
production so far.