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Rio warns of softer iron-ore output

18th October 2022

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – Major Rio Tinto has warned that iron-ore production for the full year would be at the lower-end of the original guidance of between 320-million and 335-million tonnes, despite the production in the September quarter increasing by 1% on the previous corresponding period and by 7% on the previous quarter.

Rio on Tuesday reported that iron-ore production for the third quarter ended September reached 84.3-million tonnes, with 82.9-million tonnes of ore shipped, down 1% from the previous corresponding period, and up 4% on the second quarter.

The increase in production continued on the back of the commissioning and ramp-up of the Gudai-Darri and Robe Valley operations, however, the miner noted that the full-year forecast production would be impacted by two unplanned rail outages on the Yandicoogina and Gudai-Darri lines.

The investigation into the Gudai-Darri derailment is ongoing. 

“Delivering the full potential of our assets remains a priority: production improved versus the prior quarter across most of our sites, particularly where we have implemented the Rio Tinto Safe Production System,” said CEO Jakob Stausholm.

“We progressed our excel in development objective, commissioning some major projects and advancing the next tranche of Pilbara mines, agreeing to enter a joint venture with Baowu to develop Western Range and modernising the joint venture covering the Rhodes Ridge project in the East Pilbara, unlocking a pathway to develop this significant, high quality resource.

“We also approved growth capital for underground mining at Kennecott, early works funding at Rincon Lithium and continue to progress Oyu Tolgoi. Our proposal to take Turquoise Hill Resources private has unanimous support of the Turquoise Hill board who have recommended shareholders vote in favour of the transaction,” said Stausholm.

Rio reported that mined copper production reached 138 000 t during the quarter, 10% higher than the third quarter of 2021 owing to higher grades and recoveries at Kennecott, partly offset by lower grades and recoveries at Oyu Tolgoi as a result of planned mine sequencing.

While copper production expectations have remained unchanged at between 500 000 t and 575 000 t, refined copper production guidance has been reduced from between 230 000 t and 290 000 t, to between 190 000 t and 220 000 t, given further downside risk associated with Kennecott’s smelter and refinery performance, until Rio undertook the largest rebuild in nine years which is planned for the second quarter of 2023.

Copper C1 unit costs for the full year have been revised to between 150c/lb and 170c/lb, up from the previous guidance of between 130c/lb and 150c/lb, following the reduction of the refined copper guidance range.

Meanwhile, bauxite production for the September quarter was down 2% on the previous corresponding period, and down 3% on the previous quarter, to 13.7-million tonnes, owing to equipment reliability issues at Gove.

Despite this, the full year production outlook for bauxite has remained unchanged at between 54-million and 57-million tonnes.

Aluminium production in the September quarter as also down 2% on the same period last year, but up by 4% on the previous quarter to 759 000 t, as the Kitimat smelter continues to ramp up and Boyne smelter cell recovery efforts progress as expected.

Rio noted that the Kitimat pot restarts were progressing but structural issues with the alumina conveyor system caused disruptions through the quarter slowing the rate of pot restarts. The company will continue to focus on full recovery during the course of 2023.

For the full year, aluminium production expectations have also remained unchanged at between 7.6-million and 7.8-million tonnes.

“We continue to deliver our strategy with decarbonisation at its centre. Last week we announced a partnership with the government of Canada to invest up to C$737-million over eight years to decarbonise our Rio Tinto Fer et Titane operations in Québec, and to position the business as a centre of excellence for critical minerals processing,” said Stausholm to shareholders.

“We are taking action to transform our culture and rebuild trust, implementing the recommendations of the Everyday Respect report and publishing our second progress report on our Communities and Social Performance practices, which includes increased feedback from Traditional Owner groups, with responses from seven groups compared to four in 2021.”

Edited by Creamer Media Reporter

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