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Rio Tinto Iron Ore Production Rises In 2Q

World's third largest mining company said its iron ore production rose 8 percent in second quarter and expects recovery in Chinese steel demand in second half of the year.

LONDON (AP) -- Rio Tinto PLC, the world's third largest mining company, said Wednesday that its iron ore production rose 8 percent in the second quarter and that it expects a recovery in Chinese steel demand in the second half of the year.

The positive tone to the operations review gave the Anglo-Australian company's share price a boost in London, with the stock rising 4 percent to 2,098 pence ($34.41).

However, the company added that markets remained tough over the second quarter and that its mined copper output fell 1 percent due to problems at its Escondida joint venture in Chile, the world's largest copper mine.

Rio Tinto Chief executive Tom Albanese said production cuts announced by the miner in January in response to falling demand were beginning to take effect.

"Markets remained tough in the second quarter, as expected, particularly in aluminum," Albanese said. "We continue to press ahead with actions to reduce costs across the board, align production with demand, and bring down levels of net debt."

The company said that its iron ore guidance for its global operations in 2009, incorporating Australia, Canada and Brazil, remains around 200 million tons "with the recovery in Chinese steel demand expected to continue into the second half of 2009."

It added that its share of mined copper from Escondida, which it owns jointly with BHP Billiton, fell by 41 percent from the same period last year.

The company made no comment in the operations review about the detainment of four of its employees in China, who have been held since July 5 on espionage charges.

Australian Prime Minister Kevin Rudd has warned China that the world is watching how it deals with the investigation into the charges against the three Chinese nationals and one Australian citizen.

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