Rio Tinto has posted mixed production results, showing year on year increases in iron ore, but quarter on quarter declines.
It has also lowered its iron ore guidance for 2017.
The miner recorded a 13 per cent increase year on year in its global iron ore production rates, with 84 million tonnes produced, however this figure was four per cent less than it produced in the fourth quarter of 2015.
The miner explained the uneven reporting, stating an increase compared to the first quarter of 2015 was due to the completion of some brownfield developments and expanded infrastructure in the Pilbara, but were lower than the previous quarter due to ‘normal seasonal factors’.
In the Pilbara itself Rio Tinto continued work on the Nammuldi Incremental Tonnes (NIT) project, which provides high grade low phosphorous ore into its Pilbara blend.
“The initial phase, with a five million tonne per annum capacity commenced production in the fourth quarter of 2015, and the second phase, which will take annual mine capacity from five to ten MTPA is due to come into production in the fourth quarter of 2016,” Rio Tinto said.
The miner has also mobilised civil contractors for its Cape Lambert Power Station project.
It has not changed guidance for the year, aiming for 350 million tonnes, subject to the weather. However it has lowered 2017 guidance rates, stating “with the delay in AutoHaul, production from the Pilbara is now expected to be between 330 and 340 million tonnes in 2017 (down from 350 million tonnes), subject to final productivity and capital expenditure plans”.
In terms of coal, Rio has seen a slight decline year on year in hard coking coal production – of one per cent – but did record a four per cent increase compared to the prior period, producing 1.982 million tonnes of coal for 2016 Q1.
For semi-soft and thermal coal the miner recorded increasing levels of decline, three per cent down on 2015 Q1 and eight per cent down on the previous period, producing 5.506 million tonnes for the first quarter of 2016.
However, when viewing semi-soft coking coal alone Rio Tinto saw a success story, recording a 31 per cent increase in production year on year, and a 47 per cent increase compared to the previous period.
Rio Tinto put the fall in thermal coal production down to wet weather at its Hunter Valley Operation, the sell-off of Bengalla, and the restructure of Coal & Allied.
Its guidance for coal remains unchanged.
Exploration has seen a slight improvement, spending US$128 million in the first quarter of 2016 compared to US$126 million the same time last year.
The majority of this exploration was incurred by Rio’s Diamonds & Minerals division, accounting for 40 per cent of costs, Copper & Coal at 24 per cent, and Iron Ore representing a relatively tiny five per cent, or US$6.4 million.