Rio Tinto releases third quarter production results
October 17 2022 - 5:29PM
Business Wire
Rio Tinto Chief Executive Jakob Stausholm, said: “Delivering the
full potential of our assets remains a priority: production
improved versus the prior quarter across most of our sites,
particularly where we have implemented the Rio Tinto Safe
Production System (RTSPS). We progressed our excel in development
objective, commissioning some major projects and advancing the next
tranche of Pilbara mines, agreeing to enter a joint venture with
Baowu to develop Western Range and modernising the joint venture
covering the Rhodes Ridge project in the East Pilbara, unlocking a
pathway to develop this significant, high quality resource. We also
approved growth capital for underground mining at Kennecott, early
works funding at Rincon Lithium and continue to progress Oyu
Tolgoi. Our proposal to take Turquoise Hill Resources private has
unanimous support of the Turquoise Hill Board who have recommended
shareholders vote in favour of the transaction.
“We continue to deliver our strategy with decarbonisation at its
centre. Last week we announced a partnership with the Government of
Canada to invest up to C$737 million over eight years to
decarbonise our Rio Tinto Fer et Titane operations in Québec, and
to position the business as a centre of excellence for critical
minerals processing.
“We are taking action to transform our culture and rebuild
trust, implementing the recommendations of the Everyday Respect
report and publishing our second progress report on our Communities
and Social Performance practices, which includes increased feedback
from Traditional Owner groups, with responses from seven groups
compared to four in 2021.”
Production*
Q3 2022
vs Q3 2021
vs Q2 2022
9 MTHS 2022
vs 9 MTHS 2021
Pilbara iron ore shipments (100%
basis)
Mt
82.9
-1%
+4%
234.3
-1%
Pilbara iron ore production (100%
basis)
Mt
84.3
+1%
+7%
234.7
0%
Bauxite
Mt
13.7
-2%
-3%
41.4
+1%
Aluminium
kt
759
-2%
+4%
2,226
-7%
Mined copper
kt
138
+10%
+9%
390
+8%
Titanium dioxide slag
kt
310
+48%
+6%
876
+11%
IOC** iron ore pellets and concentrate
Mt
2.8
+28%
+7%
7.8
+8%
*Rio Tinto share unless otherwise
stated
**Iron Ore Company of Canada
Q3 2022 operational highlights and other key
announcements
- In the last quarter we exceeded four years without a fatality
on a managed site. However, our all-injury frequency rate of 0.43
has deteriorated from the third quarter of 2021 (0.40), and from
the prior quarter (0.36). We continue to prioritise the safety,
health and wellbeing of our workforce and communities where we
operate.
- Pilbara operations produced 84.3 million tonnes (100% basis) in
the third quarter, 1% higher than the third quarter of 2021, and 7%
higher than the prior quarter with continued commissioning and
ramp-up of Gudai-Darri and Robe Valley. Shipments were 82.9
million tonnes (100% basis), 1% lower than the third quarter of
2021, and 4% higher than the prior quarter despite two unplanned
rail outages on the Yandicoogina and Gudai-Darri lines. The
investigation into the Gudai-Darri derailment is ongoing. Full year
shipments are expected to be at the low end of the original 320 to
335 million tonne range.
- On 14 September, we agreed to enter a joint venture with China
Baowu Steel Group Co. Ltd with respect to the Western Range iron
ore project in the Pilbara, investing $2 billion ($1.3 billion Rio
Tinto share1) to develop the mine. Its annual capacity of 25
million tonnes will help sustain production of the Pilbara Blend,
with construction expected to begin in early 2023 and first
production anticipated in 2025. The transaction with Baowu is
subject to satisfaction of various conditions precedent, including
approvals from Rio Tinto shareholders, the Australian Government,
Chinese Government regulatory agencies and the Western Australian
Government, among others.
- We have agreed, together with Wright Prospecting Pty Ltd, to
modernise the joint venture covering the Rhodes Ridge project in
the East Pilbara, Western Australia. The joint venture updates an
existing agreement between the two parties dating back to 1972 and
now provides a pathway for the development of the Rhodes Ridge
deposits utilising Rio Tinto’s rail, port and power infrastructure.
The participants have commenced an Order of Magnitude study, to be
conducted by Rio Tinto, which will consider the development of an
operation before the end of the decade with initial plant capacity
of up to 40 million tonnes annually, subject to the receipt of
relevant approvals.
- Bauxite production of 13.7 million tonnes was 2% lower than the
third quarter of 2021 due to equipment reliability issues at
Gove.
- Aluminium production of 0.8 million tonnes was 2% lower than
the third quarter of 2021, and 4% higher than the prior quarter as
the Kitimat smelter continues to ramp up and Boyne smelter cell
recovery efforts progress as expected. The Kitimat pot restarts are
progressing but structural issues with the alumina conveyor system
caused disruptions through the quarter slowing the rate of pot
restarts. We continue to focus on full recovery during the course
of 2023.
- Mined copper production of 138 thousand tonnes was 10% higher
than the third quarter of 2021 due to higher grades and recoveries
at Kennecott, partly offset by lower grades and recoveries at Oyu
Tolgoi as a result of planned mine sequencing. Refined copper
production guidance has been reduced to 190 to 220 thousand tonnes
(previously 230 to 290 thousand tonnes), given further downside
risk associated with Kennecott’s smelter and refinery performance,
until we undertake the largest rebuild in nine years which is
planned for the second quarter of 2023.
- On 27 September, we announced approval of $55 million in
development capital to start underground mining and expand
production at Kennecott. This will initially focus on the Lower
Commercial Skarn area, which will deliver a total of around 30
thousand tonnes2 of additional copper through the period to 2027
alongside open cut operations. The first ore is expected to be
produced in early 2023, with full production in the second half of
the year. Underground battery electric vehicles are currently being
trialled at Kennecott to improve employee health and safety,
increase productivity and reduce carbon emissions from future
underground mining fleets.
- On 5 September, we entered into a binding agreement to acquire
all of the remaining shares of Turquoise Hill Resources that Rio
Tinto does not currently own, subject to shareholder approval. The
transaction delivers significant value to Turquoise Hill minority
shareholders with the certainty of an all-cash offer of C$43 per
share (with a total cash consideration of $3.3 billion), and
provides greater certainty of funding for the long-term success of
the Oyu Tolgoi project.
- Titanium dioxide slag production of 310 thousand tonnes was 48%
higher than the third quarter of 2021, due to community disruptions
at Richards Bay Minerals in South Africa in 2021, and continued
improved performance of operations at Rio Tinto Fer et Titane
(RTFT), Canada.
- Iron Ore Company of Canada (IOC) production of pellets and
concentrate was 28% higher than the third quarter of 2021 due to
improved operational performance as well as timing of the planned
annual maintenance shutdown (seven days) which was successfully
completed in June (this work was completed in September in
2021).
- This quarter marked 12 months since we began the roll-out of
the Rio Tinto Safe Production System (RTSPS). We now have 22
deployments at 13 sites and 63 rapid improvement projects (Kaizens)
completed or in progress. We are on track to meet our 2022 target
of 30 deployments at 15 sites.
- In the third quarter, we entered into additional partnerships
and progressed initiatives to decarbonise our business and our
value chains, including entering strategic partnerships with Volvo
Group and Ford Motor Company. We also joined the First Movers
Coalition, a global initiative to help commercialise zero-carbon
technologies by harnessing purchasing power and supply chains.
- On 11 October, we announced a partnership with the Government
of Canada to invest up to C$737 million over the next eight years
to decarbonise our Rio Tinto Fer et Titane operations in
Sorel-Tracy, Québec, and to position the business as a centre of
excellence for critical minerals processing. The partnership will
also support projects including BlueSmelting, a low-carbon ilmenite
smelting technology, increasing scandium production, and adding
titanium metal to the portfolio. The Government of Canada is
investing up to C$222 million over the next eight years through its
Strategic Innovation Fund which supports large-scale,
transformative, and collaborative projects that will help position
Canada to prosper in the global knowledge-based economy. There is
no impact to our current capital guidance.
- On 20 July, we announced we reached agreement with the
Australian Taxation Office (ATO) on all tax matters in dispute. As
part of this agreement, in August we paid the ATO additional tax of
A$613 million for the period from 2010 to 2021. Over this period,
Rio Tinto paid nearly A$80 billion in tax and royalties in
Australia.
- On 2 August, we completed the sale of a royalty on an area
including the Cortez mine operational area and the Fourmile
development project in Nevada to RG Royalties LLC, a direct
wholly-owned subsidiary of Royal Gold Inc., for $525 million in
cash.
- In October, we entered into a definitive agreement with Uranium
Energy Corp (UEC) pursuant to which UEC will acquire 100% of Rio
Tinto’s wholly owned Roughrider uranium development project located
in Saskatchewan, Canada for total consideration of $150 million
comprised of $80 million in cash and $70 million in UEC stock. The
transaction completed on 14 October.
- On 29 September, we noted the independent valuation report
released by Energy Resources of Australia (ERA) on 26 September
2022, to determine a valuation of the company as it seeks to
address material cost and schedule overruns on the critical Ranger
rehabilitation project in Australia’s Northern Territory. Our
consistent position is that the terms of any ERA funding solution
should reflect fair value having regard to: the material cost
overruns and interim funding requirements; funds raised will be
dedicated strictly to rehabilitation and not any future
development; and the Traditional Owners, the Mirarr People’s
consistently publicly stated opposition to developing the Jabiluka
uranium deposit.
- On 6 October, we welcomed ERA’s announcement that it will renew
its independent board committee to introduce new perspectives to
address the material cost and schedule overruns on the critical
Ranger rehabilitation project. We remain committed to ensuring the
rehabilitation is completed to a standard that will establish an
environment similar to the adjacent Kakadu National Park and
continues to provide technical support to the project.
- 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 third quarter production results are available here
1Rio Tinto share includes 100% of funding costs for Paraburdoo
plant upgrades. 2Lower Commercial Skarn production targets
referred to in this release are reported as recoverable copper and
are underpinned as to 100% by Probable Ore Reserves. These
estimates of Ore Reserves were reported in a release to the
Australian Securities Exchange (ASX) dated 31 August 2022 “Rio
Tinto Kennecott Mineral Resources and Ore Reserves” (Table 1
Release) and have been prepared by Competent Persons in accordance
with the requirements of the Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves, 2012 (JORC
Code).
This announcement is authorised for release to the market by
Steve Allen, Rio Tinto’s Group Company Secretary.
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