Rio Tinto iron ore production rises on mine expansions
Rio Tinto’s iron ore shipments from the Pilbara in Western Australia have remained strong in 2018 with a 2 per cent increase on 2017 to 338 million tonnes.
This puts Rio Tinto’s iron ore production at the upper end of guidance as it continues to ramp up mine expansions.
Rio’s iron ore production has also been solidified by its successful deployment of the first driverless train network, AutoHaul. This year will see Rio Tinto focus on optimising its autonomous operations.
The company is also pursuing development of the $US2.6 billion ($3.5 billion) Koodaideri iron ore replacement mine in the Pilbara, approved last year. This will underpin production of its Pilbara Blend iron ore, starting late 2021.
Meanwhile, two $US1.55 billion projects are aimed at sustaining Rio’s iron ore production capacity at its Robe River joint venture in the Pilbara.
Rio has forecast Pilbara shipments to range between 338–350 million tonnes this year.
In other asset groups, Rio’s copper production increased by 20 per cent to 177,800 tonnes in the December quarter on the same period a year earlier.
This culminates in a 33 per cent increase to a total 633,500 tonnes for the full year, exceeding Rio’s guidance range.
The strong performance was backed by Rio Tinto Kennecott’s production increase in Utah, United States, due largely to higher grades, as well as the Escondida mine in Chile’s Atacama desert.
Escondida is the world’s largest copper-producing mine managed by BHP and also owned by Rio Tinto (30 per cent interest).
Mined copper production at Escondida last year was 29 per cent higher than 2017, reflecting the ramp-up of production to nameplate capacity following commissioning of the Los Colorados concentrator, and the absence of a labour strike which significantly impacted 2017 production.
Elsewhere, labour issues have dampened Rio’s other production results, including its aluminium output of 3.5 million tonnes, which is 3 per cent lower than 2017. This is due primarily to ongoing labour disruptions at the non-managed Becancour smelter in Canada.
Labour disputes between Richard Bay Minerals contractors and their employees in South Africa have also contributed to a 15 per cent reduction in the company’s titanium dioxide production (1.1 million tonnes) compared to a year earlier.
Production of Iron Ore Company of Canada was 20 per cent lower than 2017 following a strike at the mine. The effect was minimised by its fourth quarter production, which experienced a 4 per cent rise on the same period in 2017.
“We delivered a solid operational performance in the final quarter of 2018, in particular across our copper assets,” Rio chief executive J.S. Jacques said.
“We completed disposals of $US8.6 billion, including the Grasberg mine in Indonesia and our remaining coal assets.
“With a firm ‘value over volume’ focus and disciplined allocation of capital, we will continue to progress our strategic objectives and to deliver superior returns to shareholders in the short, medium and long term.”
Rio has sold its entire interest in the Grasberg mine for $US3.5 billion, and its coking coal assets for $US4.1 billion.