Rio Tinto releases second quarter production results

Rio Tinto has seen production increases across the board, seeing a leap in all segments bar coking coal.

The miner recorded a 10 per cent increase in iron ore production for the first half of 2016 compared to last year, and an eight per cent increase for the second quarter compared to the previous corresponding period.

Importantly, iron ore shipments rose as well, with second quarter iron ore sales nearing a run-rate of 330 million tonnes per annum, and sales exceeding production, helping the miner to reduce its stockpiles built in the first quarter.

Pilbara operations produced 160.8 million tonnes in the first half of 2016, and recorded sales of 158.9 million tonnes, achieving an average pricing of US$48.4 per dry metric tonne.

The miner is continuing to focus on its Nammuldi Incremental tonnes project.

“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 million tonnes per annum, is due to come into production in the fourth quarter of 2016,” Rio Tinto said in an official statement.

It went on to say an investment decision for Silvergrass is slated for the second half of the year.

Iron ore guidance remains at the reforecast 330 million tonnes, due to the previously mentioned delays of the AutoHaul rail system, which is impacting productivity.

Bauxite and aluminium were major performers, with Rio Tinto recording 13 and 11 per cent increases in production compared to the same time last year.

This increase enabled a five per cent jump in third party sales compared to the first half of 2015.

Copper saw a massive jump, mainly due to Kennecott activities, with the miner seeing a 114 per cent increase in the second quarter production rate at the mine compared to the same time last year.

However, poor performance at Escondida due to lower grades saw a 23 per cent lower production rates.

Rio Tinto is also forecasting lower production rates at Oyu Tolgoi’s open cut operation.

In terms of diamonds, the Argyle mine continues to be a strong performer, recording a four per cent higher rate in the first half compared to 2015, following continued ramp up of underground operations leading to higher ore volumes, which was only partially offset by lower grades.

The miner recorded a negative result in terms of hard coking coal, down 14 per cent year on year for the quarter, and eight per cent for the half.

It put much of this production loss down to the timing of the longwall changeover at Kestrel.

Semi-soft coking call also saw a massive fall from its heights earlier this year, recording a 24 per cent drop quarter on quarter, although production levels were up for the half compared to the previous first half of the year.

Thermal coal production stayed broadly in line with existing rates, recording a two per cent fall half on half, but a six per cent increase compared to the previous corresponding quarter.

In line with BHP, Rio Tinto is also refocusing on exploration, recording expenditure of US$267 million for exploration activities in the first half of 2016 compared to US$243 million last year.

Of this, 38 per cent went to Energy & Minerals exploration; 28 per cent to central exploration; a quarter was from the Copper & Diamonds division, with the rest split between aluminium and iron ore.


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