PERTH (miningweekly.com) – Mining giant Rio Tinto on Thursday revealed a push to further drive down operational costs across its Pilbara iron-ore operations.
Speaking in Sydney, Rio Tinto iron-ore CEO Andrew Harding said more than 400 initiatives were under way across the Pilbara operations to identify further cost savings and improve productivity.
During the first half of 2015, Rio produced iron-ore at a cash cost of A$15.20/t, or $16.20/t, which was significantly lower than the $20.40/t spent during the previous corresponding period.
The miner has completed its Pilbara 360 project, which increased the Pilbara production capacity to 360-million tonnes a year through the addition of the Cape Lambert Port B, which increased overall capacity at Cape Lambert port to more than 200-million tonnes a year.
“We have spent the past decade building the best iron-ore business in the world – a project that has come in on time and below initial cost estimates. We intend to optimise these new assets to deliver maximum value for shareholders and stakeholders as markets transition,” Harding said on Thursday.
“Our long-term strategy is supported by comprehensive market analysis, leadership in people, world-class technology and an unrelenting pursuit of productivity improvements. Rio Tinto has some of the best tier one mining assets in the world and our workplace culture of chasing new efficiencies will ensure we remain the best iron-ore producer in the industry.
In addition to the cost saving initiatives being undertaken, Rio was also hoping to save an additional $200-million a year in maintenance costs over the next three years, by using predictive analytics and enhanced maintenance planning systems.
“Our sector-leading Mine of the Future programme is already delivering significant group-wide productivity improvements,” said technology and innovation CEO Greg Lilleyman.
“Rio Tinto’s first-mover status in autonomous equipment has resulted in significant productivity gains while our use of big data analytics has allowed us to safely extend maintenance cycles.
“These productivity gains, combined with our asset management programme, have us on a pathway to safely reduce maintenance costs by about $200-million a year over the next three years.”
Meanwhile, Harding has noted that Rio remained optimistic about the future growth of global steel demand, which was expected to grow by 2.5% a year between now and 2030, while global iron-ore demand would increase to three-billion tonnes by 2030.
Harding said rigorous analysis confirmed that Chinese crude steel production was expected to reach around one-billion tonnes by 2030.