Rio Tinto has maintained its target to ship at the upper end of the guidance range of 330 to 340 million tonnes for the 2018 year to December 31, despite reporting a 5% slide in exports for the three months to September.
Rio said yesterday its third-quarter iron shipments fell because of planned maintenance and safety pauses across all operations following a fatality at the Paraburdoo Iron Ore mine in August.
Shipments from its Australian mines totaled 81.9 million tonnes in the third quarter compared with 85.8 million in the same period a year ago, the miner said, ending four consecutive quarters of increases.
Rio Tinto CEO J-S Jacques said in yesterday’s statement “We have delivered consistent operational performance in the third quarter, highlighted by strong production from the Group’s copper assets.”
“We made strong strategic progress with the full exit from coal, the announcement of the additional $3.2 billion of share buy-backs, and the signing of a binding conditional agreement to exit Grasberg for $3.5 billion.
“We continue to pursue all opportunities to improve productivity and drive enhanced cash flow generation. This, combined with the disciplined allocation of capital, will ensure we continue to deliver superior returns to our shareholders in the short, medium and long-term.”
Bauxite production of 12.7 million tonnes was down 1% than the corresponding quarter of 2017, with strong production at Weipa in north Queensland offset by lower production at the non-managed Sangaredi and Porto Trombetas (MRN) mines. Third party shipments increased by 2% to 8.4 million tonnes, reflecting firm demand
Aluminum production of 900,000 tonnes was also down 1% than the third quarter of 2017 due primarily to ongoing labour disruptions at the non-managed Becancour smelter in Canada. Full year guidance has been cut to between 3.4 and 3.5 million tonnes (previously 3.5 to 3.7 million tonnes).
Rio’s copper output jumped 32% to 159,700 tonnes in the quarter thanks to robust production from its Kennecott Utah Copper business.
Titanium dioxide slag production was 9% lower than the third quarter of 2017, but 28% higher than the previous quarter as production at Rio Tinto Fer et Titane and RBM ramped up following disruptions in the second quarter.
Production at Iron Ore Company of Canada was 9% lower than the third quarter of 2017, however significantly higher than the previous quarter as operations ramped up to normal production rates following a labour dispute in the previous quarter.
Elsewhere in the company, Rio said it was expecting first bauxite shipment from Amrun (in north Queensland) in the fourth quarter of 2018 with a full ramp-up in 2019.
And there seems to be more problems at the $A8 billion plus underground mine in Mongolia thanks to “difficult ground conditions” and problems in sinking the shafts for the project.
“Following an annual re-forecast of the Oyu Tolgoi underground development schedule and costs, capital costs remain in line with the overall $5.3 billion budget and construction of the first draw bell is still expected in mid-2020.
“The preliminary re-forecast assessment indicates ground conditions and shaft sinking challenges that are ultimately expected to result in a revised ramp-up schedule to sustainable first production.
Rio shares rose 1.5% yesterday to end at $78.70.