Rio Tinto’s first-quarter aluminium output fell a steeper-than-expected 6 percent and iron ore production fell 15 per cent as the firm struggled to balance supply with weak global demand.
Refined copper output rose 33 per cent, while Rio hoped to see a demand revival for iron ore in the second half of the year on the back of a recovery in China, expectations of which have already sent copper prices surging 50 per cent this year.
"We were expecting it to be soft but it was softer than we thought," UBS mining analyst Glyn Lawcock said.
"Obviously some of the curtailments that they have announced have come through quite quickly so all divisions were a little bit weaker than we thought except for copper and iron ore," he said.
Rio shares in London, which have shot up 63 per cent so far this year, fell 3.6 per cent to 2,411 pence by 9.50am, underperforming a 2.6 per cent decline in the UK mining index as copper prices fell. In Sydney they closed up 1.1 per cent.
"After being a strong performer in recent weeks we would not be surprised to see some profit-taking in the market," said analyst Nick Hatch at ING in London.
He said investors might also be disappointed that Rio failed to say much about its plan to sell minority asset stakes and more equity to state-owned Chinese aluminium group Chinalco - already its biggest shareholder - to raise $19.5 billion to help cover a punishing debt load.
Chief executive Tom Albanese reiterated Rio's commitment to the Chinalco deal, which is due to be a focus of Rio's annual general meeting in London today.
The deal has sparked opposition from some shareholders who want to participate in Rio's fundraising and Australian politicians worried about Chinese influence in a key sector.
Rio Tinto is the world's top aluminium maker since buying Canada's Alcan but the November 2007 takeover saddled the group with $39 billion in debt.
Rio's weaker aluminium output reflected supply cuts, but those along with similar moves by rivals have done little to bolster depressed prices, which have hovered around five-year lows since late last year as demand wanes for the lightweight metal, used in everything from jets to beer cans.
Reuters