Rio Tinto might be forecasting production growth for its key WA iron ore operations for 2020, but any increase will be marginal compared with 2019 and the mooted target still remains under the optimistic 350 million tonnes set a year ago for 2019.
Rio is looking for Pilbara iron ore shipments of 330 – 343 million tonnes, slightly higher than the 327.4 million tonnes shipped in 2019.
That was down 3% from 2018’s level and resulted from the impact of Cyclone Veronica, quality problems and fires at two export terminals at Cape Lambert.
After falling short of its original aim of 350 million tonnes in 2019, Rio has reduced its expectations for iron ore output in 2020, giving guidance of between 330 and 343 million tonnes for the year.
“Our guidance is framed by expectations of general stability in global GDP, tempered by negative risks, including geopolitical tensions and price volatility,” the company said.
A 37% surge in average realised prices achieved over 2018 (to $US79 a tonne) softened the small shortfall, meaning Rio is likely to report a much higher profit when it reports on February 26.
During the fourth quarter the mining giant shipped 86.8 million tonnes, down 1% from a year earlier but 1% up on shipments in the September quarter.
Total shipments for the year of 327.4 million tonnes were towards the high end of its revised (lower) 320 – 330 million tonnes guidance range.
Rio’s bauxite production was strong in the final quarter, up 28% at 15.1 million tonnes on the prior corresponding period. For the full year, Rio Tinto reported a 9% lift in bauxite production to 55.1 million tonnes.
Aluminium production for the December quarter was 783,000 tonnes, bringing full-year production to 3.171 million tonnes.
As expected, Rio mined copper production fell during the final quarter, coming in at 1387,000, down 12% quarter on quarter. Full-year mined copper production of 577,400 was down 5% on 2018.
Finally, full-year titanium dioxide slag production came in at 1.206 million tonnes.
Rio Tinto’s chief executive, J-S Jacques, was pleased with the way the company finished the year.
He said: “We finished the year with good momentum, particularly in our Pilbara iron ore operations and in bauxite, despite having experienced some operational challenges in 2019.
“We are increasing our investment, with $2.25 billion of high-return projects in iron ore and copper approved in the fourth quarter. We also boosted our exploration and evaluation expenditure to $624 million in 2019, further strengthening our pipeline of opportunities.”
Looking ahead, he said shareholders can look forward to further strong returns.
“We have the platform and performance to maintain our delivery of superior returns to shareholders over the short, medium and long-term, driven by our strong value over volume approach and ongoing disciplined allocation of capital,” he added.
For 2020, Rio is looking not only at a small lift in iron ore sales but small rises in bauxite production of 55 to 58 million tonnes, aluminium production of 3.1 to 3.3 million tonnes, and mined copper production of 530,000 to 570,000 tonnes (unchanged).