Rio Tinto on track to deliver 360 Mt/a of iron ore

Rio posted record first half production and sales of 146.3 million tonnes and 146.5 million tonnes respectively from its Pilbara iron ore business. This is an increase of ten per cent on last year’s results.

The company said production increased despite unseasonal weather in the Pilbara throughout the first half, including Tropical Cyclones Olwyn and Quang. Rio revealed around seven million tonnes of shipping capacity was lost directly at the ports due to uncharacteristically severe weather.

Rio also said its plans to increase its production capacity to 360Mt/a is on track, with the company completing key elements of the infrastructure that will support the expansion.

“The focus is now to ramp up the new equipment to full capacity and generate maximum value from the integrated system,” Rio said.

This includes improvements from debottlenecking and productivity enhancements supported by a range of low cost brownfield developments.

The miner revealed around 40 Mt/a of very low-cost brownfield expansions, principally at West Angelas, Nammuldi and Brockman mines, were completed in the half, with an average mine production capital intensity of around $US9 per tonne.

Due to the weather disruption in the first half of the year, anticipated shipments were reduced by around seven million tonnes. Rio now expects 2015 global shipments of 340 million tonnes (100 per cent basis) from its operations in Australia and Canada.

Elsewhere, Rio’s bauxite production was five per cent higher than the first half of 2014 at 10.6 Mt, setting a new first half record.

Rio this was due to a very strong performance at Weipa and the continued ramp up of production at Gove towards eight million tonnes per annum.

“Gove finished the second quarter with a monthly performance equivalent to a 7.7 million tonne run-rate, well on track to reach an eight million tonne runrate by the fourth quarter of 2015,” Rio said.

The company said this strong performance had led to a seven per cent improvement in third party sales quarter on quarter.

Alumina production was up by five per cent compared with the first half of 2014 at 1.9 Mt. rio said this was due to improved productivity at Queensland Alumina and Yarwun.

First half and second quarter aluminium production was in line with the same periods of 2014 at 818,000 tonnes.

Rio said 2015 production guidance remains unchanged at 43 million tonnes of bauxite, eight million tonnes of alumina and 3.3 million tonnes of aluminium.

Meanwhile, hard coking coal production was 13 per cent higher than the first half of 2014 at 2.1Mt. Rio said this was a result of improved production rates at Kestrel which continues to ramp up towards nameplate long-wall capacity of around six million tonnes.

Semi-soft coking coal production was five per cent higher than the first half of 2014 at 1Mt, reflecting mine production sequencing at the Hunter Valley Operations.

Thermal coal production was in line with the first half of 2014 at 4mt.

Rio Tinto’s share of production is expected to be 18 to 19 Mt of thermal coal, 3.0 to 3.4 Mt of semi-soft coking coal and 7.1 to 8.1 Mt of hard coking coal.

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