Rio Tinto posts record iron ore production

Rio Tinto has so far produced 10 per cent more iron ore this year than it did during the same period last year as an expansion of its Pilbara operations coupled with productivity gains pays off.

Rio has posted record first half iron ore production and sales of 132.4 million tonnes and 136.1 million tonnes respectively from its Pilbara iron ore business.

The result comes as the miner’s global iron ore production for the second quarter increased by 11 per cent to the previous corresponding period at 73.1 million tonnes.

This led to an increase in shipments for the second quarter also, which rose by 23 per cent on 2013 figures to 75.7 million tonnes.

 Iron ore production guidance for the full year remains unchanged at 295 million tonnes.

The growth in iron ore production comes after Rio announced in May that had completed a ramp of it its Pilbara iron ore system of mines, rail and ports, which had reached a run rate of 290 million tonnes a year.

“We achieved another half of very strong operating performance, powered by productivity gains across our business,” Rio CEO Sam Walsh said of the results.

“Our iron ore expansion continues to deliver high-margin growth reinforcing our position as a low cost producer. It has allowed us to increase shipments of our Pilbara Blend products, providing our customers with reliable, long-term supply of stable quality.”

The miner said it was targeting work to increase its run rate in the Pilbara to 390 million tonnes a year as planned.

Rail duplication and trackwork required for the ramp up has been completed while the critical port infrastructure remains on track to be finished by first half 2015.

Elsewhere, Rio lifted its full-year copper guidance and now expects its share of mined copper production to come in at 585,000 tonnes, up from earlier predictions of 575,000.

Refined copper production has been increased to 300,000 tonnes, up from 260,000 tonnes.

Thermal coal production increased by six per cent compared with the first half of 2013 due to productivity gains in the Hunter Valley and additional production from a processing plant by-product stream at Hail Creek.

Rio has increased its full year thermal coal production to 17.5 million tonnes from earlier estimates of 16.7 million tonnes.

Hard coking coal production in Australia was ten per cent higher than the first half of 2013 at 3.6 million tonnes.

Despite this the miner decreased full year expectations to 7.4 million tonnes from 8.2 million tonnes as it contends with lower than expected production during ramp up at Kestral mine and a change to the production profile from a processing plant Hail Creek which will see it produce additional higher margin thermal coal.

Alumina production guidance was cut from 8 million tonnes to 7.6 million while first-half and quarterly aluminium production was the same as last year.

Rio is keeping on top of cost cutting measures, with exploration and evaluation dropping from $542 million in the first half of 2013 to $340 million.

“With a relentless focus on achieving sustainable cost savings while delivering the highest quality growth, we continue to transform Rio Tinto into a stronger, more disciplined business that will consistently deliver strong cash flows and shareholder value,” Walsh said.

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