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Rio Tinto maintains fourth-quarter guidance across the board

16th January 2018

By: Anine Kilian

Contributing Editor Online

     

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JOHANNESBURG (miningweekly.com) – Global miner Rio Tinto reported on Tuesday that it had met its iron-ore shipment guidance for the three months ended December 31, 2017, noting a 1% rise in shipments for the year to 330.1-million tonnes.

"The business performed well in the fourth quarter and we finished the year in line with guidance across all major products," said CEO Jean-Sebastien Jacques in a statement.

He added that the company shipped 90-million tonnes of iron-ore from its Pilbara assets, showing a record quarter that demonstrated the system's growing flexibility.

The Australia-based Pilbara operations produced 329.8-million tonnes in 2017.

Meanwhile, the group’s fourth-quarter production of 87.9-million tonnes was 3% higher than the fourth quarter of 2016, reflecting the implementation of productivity projects across most sites.
 
“Commissioning of Pilbara’s Silvergrass conveyor system is complete and the plant had processed around two-million tonnes by the end of 2017,” the company added, further noting that production ramp-up would continue in 2018.
 
Rio Tinto's Pilbara shipments in 2018 are expected to be between 330-million and 340-million tonnes, subject to market conditions and any weather constraints; this partly reflects continued rail maintenance required in 2018.
 
Bauxite production of 50.8-million tonnes in 2017 was 6% higher than 2016, reflecting strong operational performances at Gove and Weipa.
 
The group’s strong production performance enabled Rio Tinto to ship 32.3-million tonnes to third parties in 2017, 10% higher than in 2016. Fourth-quarter shipments were 25% higher than the fourth quarter of 2016.

Meanwhile, Rio Tinto reported that its aluminium production of 3.6-million tonnes in 2017 was 1% lower than in 2016.

Strong operational performances were achieved across most sites, reflecting the implementation of productivity improvements across the business.
 
Average realised aluminium prices in 2017 were $2 231/t.
 
The company’s share of production in 2018 is expected to be between 49-million and 51-million tonnes of bauxite, about 8-million tonnes of alumina and around 3.7-million tonnes of aluminium.

Mined copper production at Rio Tinto Kennecott, in Utah, was 3% lower than in 2016, with lower grades partially offset by higher mill throughput.

Kennecott’s fourth-quarter production was 23% lower than the corresponding period of 2016, as mining entered an expected area of lower grade.
 
Mined copper production at the company’s Chile-based Escondida mine was 11% lower in 2017 year-on-year, owing to a 43-day strike in the first quarter, the miner said.

Fourth-quarter production at Escondida was 26% higher than the corresponding quarter of 2016, owing to an increase in concentrator throughput, largely driven by commissioning of the Los Colorados concentrator.
 
Mined copper production from the openpit in 2017 was 22% lower than in 2016, as phases 2 and 3, which were sources of higher-grade ore, were fully depleted by the end of 2016.

Despite this, the operation established new records for rates of total material moved and mill throughput in the year.

Escondida’s copper production in the fourth quarter was 23% higher than the previous quarter, owing to improved mill availability and reduced ore hardness.
 
As at December 31, 2017, Rio Tinto had an estimated 250-million pounds of copper sales that were provisionally priced at 304c/lb. The final price of these sales will be determined during the first half of 2018.
 
Meanwhile, the group’s coal output was significantly lower owing to Rio Tinto’s sale of its Coal & Allied stake in the Hunter Valley operations and Mount Thorley Warkworth.

Semi-soft coking coal output fell 51% while thermal coal output slipped 17% year-on-year. Rio Tinto’s hard coking coal output also fell owing to Cyclone Debbie impacting on performance in the first quarter of 2017.

Further, the group saw hard coking coal prices fall 8% during the year, from a first-half price of $177/t down to $164/t by the end of the year.

The company’s diamond division performed strongly, with its Argyle diamond operations seeing a 23% increase as it accessed higher-grade tailings.

Guidance for Rio Tinto's expected share of 2018 production is 7.5-million to 8.5-million tonnes of hard coking coal, 3.8-million to 4.5-million tonnes of thermal coal and 11.5-million to 12.5-million tonnes of iron-ore pellets and concentrates.

Edited by Samantha Herbst
Creamer Media Deputy Editor

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