Rio Tinto lifts iron, bauxite and copper output, warns sanctions could impact aluminium

18th April 2018

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia


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PERTH ( – Diversified giant Rio Tinto has reported production increases at its iron-ore, bauxite and copper divisions, while warning shareholders that US sanctions against Russian companies could impact aluminium production in 2018.

“We delivered a solid operational performance across most commodities in the first quarter of 2018. Our world-class Pilbara iron-ore assets continue to demonstrate flexibility and the benefits of increased productivity, and production at our bauxite and copper assets was also higher,” said CEO Jean-Sebastian Jacques.

During the three months to March, Rio produced 83.1-million tonnes of iron-ore from its Pilbara operations, an 8% increase on the previous corresponding period, while iron-ore shipments were also up by 5%, to 80.3-million tonnes.

The miner told shareholders that the Pilbara operations benefitted from fewer weather disruptions than in the first quarter of 2017, along with the ramp-up of the Silvergrass mine and the ongoing implementation of productivity improvements across the integrated system.

Meanwhile, bauxite production during the March quarter was up 12% on the previous corresponding period, to 12.6-million tonnes, driven by operational improvements.

The Gove operation, in the Northern Territory, delivered a 31% increase in production owing to the debottlenecking of the materials handling system, while stronger production was also achieved at Weipa and Sangaredi.

Aluminium production during the three months under review was down 5%, to 846 000 t, largely owing to an ongoing lock-out at the Becancour smelter, which started in January, as well as a power incident at the Dunkerque smelter, which occurred in February.

Rio on Wednesday alerted shareholders to the fact that aluminium production in the 2018 financial year could be affected by a number of issues, including the $500-million sale of the Dunkerque aluminium smelter, which was announced in January, and the $345-million sale of the ISAL smelter, in Iceland, which was announced in February.

US sanctions on various Russian individuals and companies, including the world’s second largest producer, Rusal, could also affect its aluminium output.

Rio previously said that it was reviewing its arrangements with the impacted entities, including Rusal’s 20% interest in Queensland Alumina, and its associated supply and offtake agreements, as well as bauxite sales to Rusal’s refinery in Ireland and offtake contracts for alumina that are used in Rio smelters.

Meanwhile, copper production during the March quarter was up 65% on the previous corresponding period, to 139 300 t, as output from the Escondida mine, in Chile, recovered following a labour union strike in the first half of last year.

Production from the Oyu Tolgoi mine, in Mongolia, was also up 2% during the same period, to 13 000 t.

Rio’s hard coking coal production in Australia was down 30% on the first quarter of 2017, owing to the longwall changeover and maintenance work at the Kestrel mine, as well as lower yield at the Hail Creek mine, which was impacted by coal scheduling.

The miner in March announced the sale of its remaining coal assets for a total consideration of A$4.15-billion, including the A$1.7-billion sale of its 82% interest in the Hail Creek mine and its 72.1% interest in the Valeria project to Glencore.

Rio has also sold its 75% interest in the Winchester South project to Australia’s Whitehaven Coal for A$200-million, and its 80% interest in the Kestrel mine to a consortium of buyers for A$2.25-billion.

“We announced A$5-billion of divestments in the quarter, highlighting our ongoing drive to strengthen the portfolio and raise return on assets,” said Jacques.

“By continuing to advance our mine-to-market productivity programme, while maintaining our focus on the disciplined allocation of cash, we will continue to deliver superior returns to our shareholders,” he added.

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online


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