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Rio Tinto reports another strong production quarter

Rio Tinto reports another strong production quarter

Photo by Bloomberg

16th July 2015

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – Diversified major Rio Tinto has again reported increased production from the majority of its commodities during the quarter ended June 30, as the company’s focus on efficiency continued.

“We have maintained our emphasis on efficiency and protecting returns, which is reflected in this solid production performance,” said CEO Sam Walsh.

“In iron-ore, we have completed the key elements of our Pilbara infrastructure expansion.”

The company’s global iron-ore operations reported an 8% increase in shipments during the second quarter of 2015, compared with the previous corresponding period, and a 12% increase compared with the March quarter.

Global iron-ore shipments reached 81.4-million tonnes in the quarter under review, with first-half shipments reaching 153.9-million tonnes.

Rio noted that production and shipments from the Pilbara had increased during the first half of the year, compared with last year, despite unseasonable weather throughout the first six months of the year.

Some seven-million tonnes of shipping capacity was lost directly at the ports as a result of the uncharacteristically bad weather, while heavy inland rains reduced truck use, which also resulted in lost production at the mines and impacted the ability to rail the planned tonnes.

Despite this, the Pilbara operations reported a 10% increase in first-half production, compared with the previous quarter.

Meanwhile, copper production for the quarter was down 19%, compared with the previous corresponding quarter, and down 7% on the first quarter of the year, to reach 134 000 t. Half-year production reached 278 000 t, down 14% on the first half of 2014.

Copper production at the Kennecott Utah copper project decreased by 72% year-on-year in the quarter under review, owing to the current focus on deweighting and dewatering the east wall of the Bingham Canyon, which was expected to continue into the second half of the year.

Production at the Escondida mine, in Chile, increased by 22% in the first half of the year, primarily owing to higher grades and throughput. Rio was, however, expecting the second half of the production year to be impacted by a decline in grades and water availability.

“The Oyu Tolgoi underground project is moving forward following the signing of the underground mine development and financing plan,” Walsh said.

The Oyu Tolgoi operation saw production increase by 44% to 29 800 t in the first half of the year, while quarterly production was also higher at 18 500 t.

Meanwhile, hard coking coal production was up 15% to 2.1-million tonnes in the June quarter, while half-year production was up by 13% to 4.1-million tonnes. Semisoft coking coal production also increased by 13% to just over one-million tonnes for the quarter, while first-half production was up 5% on the previous corresponding period, to 1.92-million tonnes.

Thermal coal production for the June quarter was, however, down 8% to four-million tonnes and down 1% at 8.83-million tonnes for the half-year.

Aluminium production for the quarter and half-year remained stable at 818 000 t and 1.62-million tonnes respectively.

“In aluminium, our Kitimat smelter is now producing metal from its expanded facility, bringing 80% of our smelting capacity into the first cost quartile,” Walsh said on Thursday.

The $4.8-billion upgrade increased production capacity by 48% to 420 000 t/y and ramp-up was expected to be completed by early 2016.

“Our combination of world-class assets, financial strength and operating and commercial excellence provides a sound base to continue to generate sustainable returns for our shareholders,” Walsh concluded.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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