Rio Tinto releases second quarter production results
July 14 2022 - 6:29PM
Business Wire
Rio Tinto Chief Executive Jakob Stausholm, said: “We
strengthened our operational performance at a number of sites,
which we will now replicate across the portfolio. The delivery of
first ore at Gudai-Darri, our first greenfield mine in the Pilbara
for over a decade, increases mine capacity and supports production
of our flagship Pilbara Blend™. We also fired the first draw bell
at the Oyu Tolgoi underground project in June, and started
producing scandium and tellurium. These critical minerals are being
extracted from existing waste streams at our titanium operation in
Quebec and copper operation in Utah, without the need for new
mining.
“We are committed to transforming our culture and building
better relationships. In May, we signed a Heads of Agreement with
the Puutu Kunti Kurrama and Pinikura (PKKP) people which will guide
the co-management of PKKP country where mining takes place.
“We made progress against our four objectives during the first
half and we are determined to further strengthen Rio Tinto while
investing to grow in the commodities needed for the energy
transition, decarbonise our portfolio, be a partner and employer of
choice, maintain our tight capital allocation and continue to pay
attractive dividends."
Production*
Quarter 2
2022
vs Q2
2021
vs Q1
2022
H1
2022
vs H1
2021
Pilbara iron ore shipments (100% basis)
(Mt)
79.9
+5%
+12%
151.4
-2%
Pilbara iron ore production (100%
basis) (Mt)
78.6
+4%
+10%
150.3
-1%
Bauxite (Mt)
14.1
+3%
+4%
27.8
+2%
Aluminium (kt)
731
-10%
-1%
1,467
-9%
Mined copper (kt)
126
+9%
+1%
252
+7%
Titanium dioxide slag (kt)
293
-2%
+7%
566
-2%
IOC iron ore pellets & concentrate
(Mt)
2.6
-4%
+8%
5.0
-1%
* Rio Tinto share unless otherwise stated.
Q2 2022 operational highlights and other key
announcements
- We are focused on the safety, health and wellbeing of our
workforce and communities where we operate. Our all-injury
frequency rate of 0.35 is an improvement from the second quarter of
2021 (0.42), and in line with the prior quarter (0.35). We have
seen an overall decline in COVID-19 cases, with spikes at some of
our operations. We continue to monitor the situation and remain
vigilant.
- Gudai-Darri delivered first ore from the main plant in June. As
it ramps up, we expect increased production volumes and improved
product mix in the second half, with Gudai-Darri capacity to be
reached in 2023. Pilbara operations produced 78.6 million tonnes
(100% basis) in the second quarter, 4% higher than the second
quarter of 2021. While significantly higher than average rainfall
in May impacted mine production, continued focus on mine pit health
and commissioning of Gudai-Darri supported a stronger second
quarter. Shipments were 79.9 million tonnes (100% basis), 5% higher
than the second quarter of 2021. Full year shipments guidance
remains unchanged at 320 to 335 million tonnes.
- Bauxite production of 14.1 million tonnes was 3% higher than
the second quarter of 2021 due to strong operational performance at
Weipa as a result of improved plant reliability at Amrun.
- Aluminium production of 0.7 million tonnes was 10% lower than
the second quarter of 2021 due to reduced capacity at our Kitimat
smelter in British Columbia following the strike which commenced in
July 2021. A controlled restart began at the end of the second
quarter of 2022 with ramp-up progressing subject to labour
availability. Production at Boyne smelter in Queensland was
impacted due to process instability following COVID-19 related
unplanned absences. Production has been stabilised and the cells
that have been taken offline are being ramped up over the next 12
months. All of our other smelters continued to have stable
performance. Guidance has been lowered to 3.0 to 3.1 million tonnes
(previously 3.1 to 3.2 million tonnes).
- Mined copper production of 126 thousand tonnes was 9% higher
than the second quarter of 2021 due to higher material movement and
higher grades and recoveries at Kennecott and Escondida, partly
offset by lower grades and recoveries at Oyu Tolgoi as a result of
planned mine sequencing.
- On 18 May, we announced we had agreed to amend the funding plan
with Turquoise Hill Resources (TRQ) in order to provide liquidity
of up to $400 million in short-term early advances, while the
Special Committee of TRQ evaluates our C$34 per share all-cash
proposal to acquire the approximately 49% of the issued and
outstanding shares of TRQ that Rio Tinto does not currently own.
The deadline in the funding plan for TRQ to conduct an initial
equity offering of at least $650 million has also been extended
from the end of August to the end of 2022.
- Titanium dioxide slag production of 293 thousand tonnes was 2%
lower than the second quarter of 2021 with steady performance at
Richards Bay Minerals in South Africa and improved stability of
operations at Rio Tinto Fer et Titane, Canada. There were some
operational disruptions at QIT Madagascar Minerals following
cyclones in Madagascar.
- Iron Ore Company of Canada (IOC) achieved milestones in May
including record safety performance year to date (0.26 AIFR versus
0.73 in 2021) and monthly records for concentrate production and
total material moved. Production of pellets and concentrate was 4%
lower than the second quarter of 2021 due to the planned annual
maintenance shutdown (seven days) which was successfully completed
in June (this work was completed in September in 2021).
- In the second quarter, we continued to successfully roll out
the Rio Tinto Safe Production System (RTSPS) and now have 15
deployments across the business at 11 sites, with 30 rapid
improvement projects (Kaizens) either completed or in progress. In
the half, there has been a 9% year on year improvement in average
operating time across processing plants and drills at deployment
sites versus the same period of 2021. We are on track to meet our
2022 target of 30 deployments at 15 sites.
- In the second quarter, we entered into additional partnerships
and progressed initiatives to decarbonise our business and our
value chains. These include a Memorandum of Understanding with
Salzgitter to work together towards carbon-free steelmaking, and a
strategic equity investment in Nano One - a clean technology
innovator in battery materials.
- As the result of Queensland Alumina Limited's (QAL) activation
of a step-in process following sanction measures by the Australian
Government, Rio Tinto has taken on 100% of capacity for as long as
the step-in continues. This results in use of Rusal’s 20% share of
capacity by Rio Tinto under the tolling arrangement with QAL. This
additional output is excluded from the production tables in this
report as QAL remains 80% owned by Rio Tinto and 20% owned by
Rusal.
- Higher rates of inflation have increased our closure
liabilities with an impact to underlying earnings. In the first
half of 2022, this resulted in increased charges of approximately
$400 million pre-tax within underlying earnings compared with the
first half of 2021, including a $300 million increase in
amortisation of discount, with the remainder impacting EBITDA.
- 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.
The full second quarter production results are available
here
riotinto.com
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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