Rio’s half yearly report delivers strong iron ore performance

Rio Tinto’s latest half yearly report has indicated a $3.2 billion net cash generation from their operations in their latest half year financial report.

Rio’s Pilbara operations produced 160.8 million tonnes in this first half, ten per cent higher than the same time in 2015. This was attributed to low weather impacts, operational improvements, expansions, and the development of new mines.

The company has also reduced their net debt during the first half to $12.9 billion, after paying last year’s final dividends in April 2016.

Rio CEO Jean-Sebastien Jacques said they have also reported “underlying earnings of $1.6 billion against a backdrop of continued volatility and lower commodity prices”.

This comes after they announced a reinvestment in the production of their Silvergrass iron ore mine in the Pilbara, at a $338 million development cost. The mine’s first production stage began at the end of last year, with the second – increasing the mines capacity from five to ten million tonnes – set for production at the end of this year. Full production is expected in 2018.

The report indicated that their Pilbara unit cash costs reduced to $14.30 per tonne in the first half of 2016 compared to the $16.20 per tonne at the same time last year. This was as a result of lower selling costs, increased volumes, exchange rate movements, reduced fuel prices, and increased labour productivity.

The company is expecting to garner between 330 and 340 million tonnes from the Pilbara next year.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.