Rio Tinto releases fourth quarter production results
January 16 2023 - 4:29PM
Business Wire
Rio Tinto Chief Executive Jakob Stausholm, said: “We were
fatality free for the fourth consecutive year, as we continue to
put safety at the forefront of everything we do. A number of
operational records were achieved in the second half across the
Pilbara iron ore mine and rail system. Deployment of our Safe
Production System resulted in improved performance at those sites
and overall production was higher versus 2021 across all
commodities, with the exception of aluminium and alumina.
“The acquisition of Turquoise Hill Resources strengthens our
copper portfolio and demonstrates our ability to allocate capital
with discipline to grow in materials the world needs for the energy
transition and delivering long-term value for our shareholders.
Copper guidance has been increased accordingly. We continue to
invest in future growth, progressing the Rincon lithium project in
Argentina and are working with our partners to progress the
Simandou project in Guinea.
“We continue to work hard to transform our culture and invest in
genuine partnerships. I am proud that we have reached new
agreements with the Yindjibarndi and Puutu Kunti Kurrama and
Pinikura peoples in Australia, and the Pekuakamiulnuatsh First
Nation in Canada.
“In line with our new purpose of finding better ways to provide
the materials the world needs, we will continue to progress our
four objectives and strategy to strengthen the business, which will
lead to profitable growth and continue to deliver attractive
shareholder returns.”
Production*
Quarter 4
2022
vs Q4
2021
vs Q3
2022
Full Year
2022
vs Full Year
2021
Pilbara iron ore shipments (100%
basis)
Mt
87.3
+4%
+5%
321.6
0%
Pilbara iron ore production (100%
basis)
Mt
89.5
+6%
+6%
324.1
+1%
Bauxite
Mt
13.2
+1%
-4%
54.6
+1%
Aluminium
kt
783
+3%
+3%
3,009
-4%
Mined copper
kt
131
-1%
-5%
521
+6%
Titanium dioxide slag
kt
323
+42%
+4%
1,200
+18%
IOC** iron ore pellets and concentrate
Mt
2.5
+1%
-9%
10.3
+6%
*Rio Tinto share unless otherwise
stated
**Iron Ore Company of Canada
2022 operational highlights and other key
announcements
- We continue to prioritise the safety, health and wellbeing of
our workforce and communities where we operate. We experienced our
fourth consecutive year with no fatalities at our managed
operations, and continue to work hard with our partners to achieve
the same results at our non-managed assets and marine
operations.
- Pilbara operations produced 324.1 million tonnes (100% basis)
in 2022, 1% higher than 2021. Shipments were 321.6 million tonnes
(100% basis), in line with 2021. Performance improvements continued
across the system and we achieved record second half performance
across the mine and rail system. We expect Gudai-Darri to reach its
nameplate capacity on a sustained basis during 2023.
- Bauxite production of 54.6 million tonnes was 1% higher than
2021, despite equipment reliability issues at Weipa and Gove in
Australia.
- Aluminium production of 3.0 million tonnes was 4% lower than
2021 due to reduced output at our Kitimat smelter in British
Columbia, Canada and Boyne smelter in Queensland, Australia. The
rate of pot restarts at Kitimat picked up in the fourth quarter and
Boyne smelter cell recovery efforts continued. Recovery at both
smelters is progressing with full ramp-up expected to be completed
during the course of 2023. All of our other aluminium smelters
continued to demonstrate stable performance.
- On 1 December, we commissioned the second tunnel (T2) to carry
water into the Kemano Powerhouse in British Columbia, marking the
end of the Kemano T2 hydropower project. The new, 16-kilometre
tunnel produced its first megawatt of electricity in July 2022
after construction was completed in May 2022. Both T1 and T2 are
now operating together, ensuring the long-term reliability of the
power supply for our aluminium smelter in Kitimat and neighbouring
communities.
- Mined copper production of 521 thousand tonnes was 6% higher
than 2021 due to higher grades at Kennecott and Escondida, partly
offset by lower grades and recoveries at Oyu Tolgoi as a result of
planned mine sequencing. Unplanned maintenance was required at
Kennecott in the fourth quarter of 2022 in our anode furnaces
leading to extended downtime and continued poor anode production,
likely to result in weak cathode production in the first quarter of
2023. Refined copper production at Kennecott will continue to be
challenged due to the smelter and refinery performance, until we
undertake the largest rebuild in nine years which is planned for
the second quarter of 2023 and is expected to take approximately
three months.
- On 16 December, we completed the acquisition of Turquoise Hill
Resources Ltd for a consideration of approximately $3.1 billion1,
simplifying ownership of the world-class Oyu Tolgoi mine in
Mongolia, significantly strengthening Rio Tinto’s copper portfolio,
and demonstrating our long-term commitment to the project and
Mongolia. We now hold a 66% direct interest in the Oyu Tolgoi
project with the remaining 34% owned by the Government of Mongolia
through Erdenes Oyu Tolgoi. Cash consideration of approximately
$2.9 billion was paid in December 2022. Oyu Tolgoi production for
2022 remains on a 33.52% Rio Tinto share basis.
- Titanium dioxide slag production of 1,200 thousand tonnes was
18% higher than 2021, due to community disruptions at Richards Bay
Minerals (RBM) in South Africa in 2021, and continued improved
performance of operations at Rio Tinto Fer et Titane (RTFT),
Canada. Production constraints related to nationwide electrical
power loadshedding at RBM were experienced in the fourth
quarter.
- Iron Ore Company of Canada (IOC) production of pellets and
concentrate was 6% higher than 2021. Successful deployment of the
Rio Tinto Safe Production System (SPS) at the concentrator was
completed in the year, with record performance metrics achieved in
the year, including monthly records for concentrate production and
total material moved in the second quarter. Planning for SPS
deployment at the pellet plant commenced in December.
- We achieved our SPS deployment target for 2022 with 30
deployments across 16 sites. Roll-outs are ongoing to continuously
improve safety, strengthen employee engagement and sustainably lift
operational performance across our global portfolio.
- As reported in the first half, higher rates of inflation have
increased our closure liabilities with an impact to underlying
earnings. This resulted in increased charges for the year of
approximately $1.3 billion pre-tax within underlying earnings
(first half 2022: $0.4 billion) compared with 2021, including a
$1.1 billion full year increase in amortisation of discount (first
half 2022: $0.3 billion), with the remainder impacting Underlying
EBITDA.
- As part of the agreement reached with the Australian Taxation
Office (ATO) in July, we paid the ATO additional tax of A$613
million for the period from 2010 to 2021 in August 2022.
- The sale of a royalty on an area including the Cortez mine
operational area, a direct wholly-owned subsidiary of Royal Gold
Inc., for $525 million in cash, was settled in August. This amount
will be recorded in 'Sales of financial assets' in the group cash
flow statement and is therefore not included in Free cash
flow.
- The sale of our wholly owned Roughrider uranium development
completed in October for total consideration of $150 million,
including $80 million in cash, will be recorded in 'Disposal of
subsidiaries’ in the group cash flow statement and is therefore not
included in Free cash flow.
- On 30 November, we provided a detailed update at our Investor
Seminar on execution of our strategy and evolution of our culture,
including SPS and decarbonisation activities, to strengthen the
business, grow in a decarbonising world and continue to deliver
attractive shareholder returns. Capital expenditure to decarbonise
our assets of an estimated $7.5 billion to 2030 is being
prioritised and phased. This remains subject to Traditional Owner
and other stakeholder engagement, regulatory approvals and
technology developments. New long-term power contracts will also be
required for the aluminium business to meet targets. Our
incremental operating expenditure on building new teams and energy
efficiency initiatives remains around $200 million per annum in
addition to Research and Development investment.
- On 19 December, we announced the appointment of Kaisa Hietala
as a non-executive director to the Rio Tinto Board, commencing 1
March 2023. Ms Hietala, a Finnish citizen, played a central role in
the commercial transformation of Neste, the world’s largest and
most profitable producer of renewable products, as Executive Vice
President of Renewable Products. She serves on the Boards of Exxon
Mobil and Smurfit Kappa Group, and is Chair of the Board at
Tracegrow, a private Finnish sustainable fertilisers company.
- All figures in this report are unaudited. All currency figures
in this report are US dollars, and comments refer to Rio Tinto’s
share of production, unless otherwise stated.
1Based on a value of C$43.00 per share and a USD/CAD FX rate of
1.3618 as of 15 December 2022 and includes amounts we expect to pay
in 2023.
The full fourth quarter production results are available
here.
This announcement is authorised for release to the market by
Steve Allen, Rio Tinto’s Group Company Secretary.
LEI: 213800YOEO5OQ72G2R82
Classification: 3.1 Additional regulated information required to
be disclosed under the laws of a Member State
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