Rio Tinto releases first quarter production results
April 19 2023 - 6:30PM
Business Wire
Rio Tinto Chief Executive Jakob Stausholm said: “We continue to
make steady progress with our highest ever first quarter shipments
achieved in the Pilbara iron ore business. Through the ongoing
deployment of our Safe Production System we expect to see a
sustainable lift in operating performance across our global
portfolio over time, in line with improvements already
achieved.
“We remain focused on disciplined growth in materials the world
needs for the energy transition, delivering first sustainable
production from the underground mine at Oyu Tolgoi in Mongolia and
progressing early works on the Rincon lithium project in Argentina.
We advanced the Simandou high grade iron ore project in Guinea with
our partners, and entered into an agreement for a joint venture to
unlock La Granja in Peru, one of the largest undeveloped copper
projects in the world.
“We continue to take action to strengthen our culture and invest
in genuine partnerships, implementing the recommendations of the
Everyday Respect report and reaching a new agreement with the
Naskapi Nation of Kawawachikamach in Canada. As we progress against
our four objectives and strategy, we have a clear long-term pathway
to profitable growth and continued attractive shareholder
returns.”
Production*
Quarter 1
2023
vs Q1
2022
vs Q4
2022
Pilbara iron ore shipments (100% basis)
(Mt)
82.5
+16%
-6%
Pilbara iron ore production (100%
basis) (Mt)
79.3
+11%
-11%
Bauxite (Mt)
12.1
-11%
-8%
Aluminium (kt)
785
+7%
0%
Mined Copper (consolidated basis)
(kt)
145
0%
-5%
Titanium dioxide slag (kt)
285
+4%
-12%
IOC** iron ore pellets &
concentrate (Mt)
2.5
+5%
0%
*Rio Tinto share unless otherwise
stated
**Iron Ore Company of Canada
Q1 2023 operational highlights and other key
announcements
- Our all-injury frequency rate of 0.32 was a small improvement
from the first quarter of 2022 (0.34), and an improvement against
the prior quarter (0.45). We are undertaking an investigation at
the Simandou iron ore project following a Permanently Disabling
Injury (PDI). We continue to prioritise the safety, health and
wellbeing of our workforce and communities where we operate.
- Pilbara operations produced 79.3 million tonnes (100% basis) in
the first quarter, 11% higher than the first quarter of 2022.
Shipments were 82.5 million tonnes (100% basis), 16% higher than
the corresponding period of 2022, and a first quarter record, with
stronger mine production and a drawdown of stocks.
- Bauxite production of 12.1 million tonnes was 11% lower than
the first quarter of 2022 as our Weipa operations were affected by
higher-than-average rainfall during the annual wet season.
Production was further affected by equipment downtime at both Weipa
and Gove. We have maintained our bauxite production guidance at 54
to 57 million tonnes as we implement plans to recover lost
production at both sites through the remainder of the year.
- Aluminium production of 0.8 million tonnes was 7% higher than
the first quarter of 2022 as we benefited from the continued
ramp-up of the Kitimat smelter. Recovery at the Boyne and Kitimat
smelters is progressing to plan with full ramp-up expected to be
completed later in the year. All our other smelters continued to
demonstrate stable performance during the quarter.
- Mined copper production of 145 thousand tonnes on a
consolidated basis, was in line with the first quarter of 2022.
- Kennecott mined copper production was 36% lower than the first
quarter of 2022 with lower throughput due to the combined impact of
record snowfall in the period and the failure of the conveyor belt
that links the mine to the concentrator in March. The concentrator
is expected to operate at reduced rates until the third quarter of
2023.
- Escondida mined copper production was 6% higher than the first
quarter of 2022 due to 10% higher throughput, which returned to
normal levels after the corresponding quarter in 2022 included
impacts from the COVID-19 pandemic and extended plant maintenance.
During the quarter mined copper production was impacted compared to
plan by geotechnical challenges in the open pit. Mining has been
resequenced, with continued optimisation of the pit in light of the
geotechnical risk.
- Oyu Tolgoi mined copper production on a 100% basis increased
41% from the first quarter of 2022 due to concentrator maintenance
in the prior period and higher copper head grades (0.49% vs.
0.40%). First sustainable underground production was achieved
during the period with 0.7 million tonnes of ore milled from the
underground mine at an average copper head grade of 1.36%, and 9.6
million tonnes from the open pit with an average grade of
0.43%.
- Mined copper guidance for 2023 has been lowered to 590 to 640
thousand tonnes (previously 650 to 710 thousand tonnes) primarily
reflecting the impact of the conveyor outage at Kennecott, together
with the geotechnical challenges in the open pit at Escondida.
- On 31 March, we entered into an agreement to form a joint
venture that will work to unlock the development of the La Granja
copper project in Peru, one of the largest undeveloped copper
deposits in the world. Under the proposed transaction, First
Quantum Minerals will acquire a 55% stake in the project for $105
million, and commit to further invest up to $546 million into the
joint venture to sole fund capital and operational costs to take
the project through a feasibility study and toward
development.
- Titanium dioxide slag production of 285 thousand tonnes was 4%
higher than the first quarter of 2022, due to continued improved
performance at Rio Tinto Iron and Titanium Quebec Operations,
Canada and Richards Bay Minerals, South Africa.
- IOC production was 5% higher than the first quarter of 2022,
and in line with the prior quarter, with weather related issues
impacting operations during the period. Shipments were 6% higher
than the first quarter of 2022, and 4% lower than the prior
quarter, following loading restrictions at the rail and port.
- At our Rincon lithium project in Argentina, our $140 million
estimate and schedule to develop the starter plant is under review
in response to significant local inflation and cost escalation for
equipment.
- In the first quarter, we commenced deployment of the Safe
Production System (SPS) at a further two sites, taking the total
sites where SPS is being deployed to 18. SPS focuses on
continuously improving safety, strengthening employee engagement
and sustainably lifting operational performance across our global
portfolio. We remain on track for deployments across four to eight
new sites in 2023.
- On 16 February, we re-financed the $3.9 billion Oyu Tolgoi
project finance facility with a syndicate of international
financial institutions, export credit agencies and commercial
lenders. The lenders have agreed to a deferral of the principal
repayments by three years to June 2026 and an extension of the
final maturity date by five years from 2030 to 2035.
- On 6 March, we announced the resolution of a previously
self-disclosed investigation by the US Securities and Exchange
Commission (SEC) into certain contractual payments made to a former
consultant over a decade ago in 2011, relating to the Simandou
project in Guinea.
- On 7 March, we announced the pricing of $650 million of 10-year
fixed rate, and $1.1 billion of 30-year fixed rate, SEC-registered
debt securities. The 10-year notes will pay a coupon of 5.000 per
cent and will mature March 9, 2033 and the 30-year notes will pay a
coupon of 5.125 per cent and will mature March 9, 2053.
- On 16 March, we announced that Dean Dalla Valle and Susan
Lloyd-Hurwitz, both Australian citizens, will join the Board as
non-executive directors on 1 June 2023. Mr Dalla Valle brings four
decades of operational and project management experience in the
resources and infrastructure sectors. Ms Lloyd-Hurwitz brings
extensive leadership experience in Australia’s built environment
sector. She is known for her transformational leadership on
cultural change, gender equity, diversity and inclusion, and
sustainability.
- 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 first quarter production results are available
here.
This announcement is authorised for release to the market by
Steve Allen, Rio Tinto’s Group Company Secretary.
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