PERTH (miningweekly.com) – Diversified major Rio Tinto has reported a solid second quarter of production, with iron-ore, bauxite and copper up from the previous corresponding period.
Rio on Friday reported that iron-ore production from the Pilbara had increased by 4% in the June quarter, compared with the same period in 2021, to 78.6-million tonnes, while shipments in the same period increased by 5%, to 79.9-million tonnes.
For the half-year, iron-ore production was down 1% on the previous corresponding period to 150.3-million tonnes.
Full year shipments guidance remains unchanged at 320-million to 335-million tonnes.
“We strengthened our operational performance at a number of sites, which we will now replicate across the portfolio. The delivery of first ore at Gudai-Darri, our first greenfield mine in the Pilbara for over a decade, increases mine capacity and supports production of our flagship Pilbara Blend,” said CEO Jakob Stausholm.
Gudai-Darri delivered first ore from the main plant in June. As it ramps up, Rio expecs increased production volumes and improved product mix in the second half, with Gudai-Darri capacity to be reached in 2023.
Meanwhile, Rio noted that bauxite production for the second quarter was up 3% on the previous corresponding period, to 14.1-million tonnes, with 27.8-million tonnes produced in the first half of the financial year.
The increase in bauxite production was due to strong operational performances at the Weipa operation, as a result of improved plant reliability at Amrun.
Copper production for the June quarter was up 9% on the same period from last year, to 126 000 t, while half-year production was up 7% to 252 000 t, owing to higher material movement and higher grades and recoveries at Kennecott and Escondida, partly offset by lower grades and recoveries at Oyu Tolgoi as a result of planned mine sequencing.
“We also fired the first draw bell at the Oyu Tolgoi underground project in June, and started producing scandium and tellurium. These critical minerals are being extracted from existing waste streams at our titanium operation in Quebec and copper operation in Utah, without the need for new mining,” said Stausholm.
In May, Rio announced an agreement to amend the funding plan with joint venture partner Turquoise Hill Resources (TRQ) in order to provide liquidity of up to $400-million in short-term early advances, while the Special Committee of TRQ evaluates Rio’s C$34 a share all-cash proposal to acquire the approximately 49% of the issued and outstanding shares of TRQ that Rio does not currently own.
The deadline in the funding plan for TRQ to conduct an initial equity offering of at least $650-million has also been extended from the end of August to the end of 2022.
Meanwhile, Rio on Friday reported that aluminium production for the quarter was down 10%, to 731 000 t, and down 9% for the half-year to 1.46-million tonnes, owing to reduced capacity at the Kitimat smelter in British Columbia following the strike which started in July 2021.
Rio told shareholders that a controlled restart began at the end of the second quarter of 2022 with ramp-up progressing subject to plant stability.
Production at Boyne smelter, in Queensland, was impacted owing to process instability following Covid-19-related unplanned absences. Production has been stabilised and the cells that have been taken offline are being ramped up over the next 12 months. All of Rio’s other smelters continued to have stable performance.
Aluminium production guidance has been lowered to between 3-million and 3.1-million tonnes for the full year, from the previous estimate of between 3.1-million and 3.2-million tonnes.
Additionally, titanium dioxide slag production of 293 000 t was 2% lower than the second quarter of 2021 with steady performance at Richards Bay Minerals, in South Africa, and improved stability of operations at Rio Tinto Fer et Titane, Canada. There were some operational disruptions at QIT Madagascar Minerals following cyclones in Madagascar.
“We made progress against our four objectives during the first half and we are determined to further strengthen Rio Tinto while investing to grow in the commodities needed for the energy transition, decarbonise our portfolio, be a partner and employer of choice, maintain our tight capital allocation and continue to pay attractive dividends,” Stausholm said.
Rio has meanwhile warned of higher rates of inflation, which has increased the company’s closure liabilities, with an impact on underlying earnings.
In the first half of 2022, this resulted in increased charges of approximately $400-million pre-tax within underlying earnings compared with the first half of 2021, including a $300-million increase in amortisation of discount, with the remainder impacting earnings before interest, tax, depreciation and amortisation.