Rio Tinto releases second quarter production results
July 18 2023 - 6:33PM
Business Wire
Rio Tinto Chief Executive Jakob Stausholm said: “We built
further momentum in our Pilbara iron ore business for the quarter,
and now expect to deliver shipments in the upper half of our
guidance range for the year. The ramp-up of the Oyu Tolgoi
underground mine progressed ahead of plan, and we remain on track
to more than triple its copper production by the end of the decade.
Production downgrades during the quarter highlight that we still
have much more to do elsewhere, as we roll out the Safe Production
System to create stability and achieve excellence across our global
portfolio.
“We continued to take disciplined measures to grow in the
materials the world needs for the energy transition, with
investments to expand our low carbon aluminium production and
increase our underground copper production at Kennecott.
“We are taking practical steps and making investments to
decarbonise, being the first to convert an open pit mine to
renewable diesel at our Boron operations, signing a memorandum of
understanding with Baowu to explore decarbonisation of the steel
value chain and delivering first production from our
ground-breaking BlueSmelting demonstration plant at Sorel-Tracy in
Quebec in July.”
Production*
Quarter 2 2023
vs Q2 2022
vs Q1 2023
H1 2023
vs HY 2022
Pilbara iron ore shipments (100% basis)
(Mt)
79.1
-1%
-4%
161.7
+7%
Pilbara iron ore production (100%
basis) (Mt)
81.3
+3%
+2%
160.5
+7%
Bauxite (Mt)
13.5
-5%
+12%
25.6
-8%
Aluminium (kt)
814
+11%
+4%
1,598
+9%
Mined Copper (consolidated basis)
(kt)
145
-1%
0%
290
-1%
Titanium dioxide slag (kt)
303
+4%
+6%
589
+4%
IOC** iron ore pellets &
concentrate (Mt)
2.1
-21%
-18%
4.6
-8%
*Rio Tinto share unless otherwise
stated
**Iron Ore Company of Canada
Q2 2023 operational highlights and other key
announcements
- Our all-injury frequency rate of 0.36 was a small increase from
the second quarter of 2022 (0.35), and from the prior quarter
(0.35). Investigations are underway following significant process
safety incidents. There were two incidents at our Rio Tinto Iron
and Titanium (RTIT) Sorel-Tracy complex which did not result in
injuries. The Kennecott operation experienced an escape of furnace
gas during the maintenance shut, where all treated people have been
cleared. We are heightening our focus on managing these risks and
continue to prioritise the safety, health and wellbeing of our
workforce, and communities where we operate.
- Pilbara operations produced 81.3 million tonnes (100% basis) in
the second quarter, 3% higher than the second quarter of 2022 as
Gudai-Darri achieved sustained nameplate capacity during the
period. Shipments were 79.1 million tonnes (100% basis), 1% lower
than the corresponding period of 2022, reflecting the impact of
planned major maintenance at the Dampier port and a train
derailment. With continued operational improvements across the
Pilbara system, and the implementation of the Safe Production
System, full year shipments are now expected to be in the upper
half of the original 320 to 335 million tonne range.
- Bauxite production of 13.5 million tonnes was 5% lower than the
second quarter of 2022 as our Weipa operations were impacted by the
higher-than-average first quarter rainfall, which continued to
reduce pit access and led to longer haul distances. Production was
further affected by equipment downtime at both Weipa and Gove. As a
result, our bauxite full year production is expected to be at the
lower end of our 54 to 57 million tonne range, as we implement
plans to recover lost production at both operations through the
remainder of the year.
- Aluminium production of 0.8 million tonnes was 11% higher than
the second 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.
- On 12 June, we announced an investment of $1.1 billion to
expand our AP60 aluminium smelter equipped with low-carbon
technology at Complexe Jonquière in Canada. The total investment
includes up to $113 million of financial support from the Quebec
government. This expansion will coincide with the gradual closure
of potrooms at the Arvida smelter on the same site. While at our
Alma smelter in Lac-Saint-Jean, Quebec, we commenced construction
to increase our capacity to cast low-carbon, high-value aluminium
billets.
- Mined copper production of 145 thousand tonnes (on a
consolidated basis), was 1% lower than the second quarter of 2022.
We benefited from the continued ramp-up of the high grade
underground mine at Oyu Tolgoi. However, this benefit was more than
offset by the continued operation of Kennecott’s concentrator at
reduced rates, as we recovered from a conveyor failure in March
2023, and unplanned maintenance, and lower crusher and conveyor
availability, at Escondida.
- Refined copper guidance has been reduced to 160 to 190 thousand
tonnes (previously 180 to 210 thousand tonnes) and our copper C1
unit cost guidance has been raised to 180 to 200 US cents/lb (from
160 to 180 US cents/lb) as completion of the rebuild of the
Kennecott smelter is now expected in September 2023 (previously
August 2023). The extension of the rebuild is due to the addition
of a full rebuild of the flash converting furnace to the scope,
which is expected to further improve asset stability and process
safety management.
- On 20 June, we announced $498 million of funding to deliver
underground development and infrastructure for an area known as the
North Rim Skarn1 (NRS) at Kennecott. Production from the NRS will
commence in 2024 and is expected to ramp up over two years, to
deliver ~250 thousand tonnes of additional mined copper over the
next 10 years2 alongside open cut operations.
- Titanium dioxide slag production of 303 thousand tonnes was 4%
higher than the second quarter of 2022, due to improved operational
performance at our smelters. Notwithstanding, our RTIT Quebec
Operations experienced two incidents in separate furnaces in June
and July which we are investigating. Given these investigations and
weaker market conditions, our full year production is expected to
be at the lower end of the 1.1 to 1.4 million tonne range.
- IOC production was 21% lower than the second quarter of 2022 as
we lost ~3.5 weeks of production in June, primarily due to
wildfires in Northern Quebec, together with a slightly extended
shutdown. Operations have resumed, however our full year production
guidance has been reduced to 10.0 to 11.0 million tonnes
(previously 10.5 to 11.5 million tonnes), and remains subject to
further disruption from fire conditions.
- At our Rincon lithium project in Argentina, our $140 million
estimate and schedule to develop the starter plant remains under
review in response to cost escalation.
- In the second quarter, we commenced deployment of the Safe
Production System at a further two sites, taking the total to 20
sites. The Safe Production System focuses on continuously improving
safety, strengthening employee engagement and sustainably lifting
operational performance across our global portfolio. While we still
have a lot to do to see sustainable improvement, site deployments
are rolling out according to plan and we expect to be at the upper
end of our range of four to eight new sites in 2023.
- On 13 June, we announced that Ivan Vella, Chief Executive,
Aluminium, has accepted a new position outside of Rio Tinto and
will leave in December 2023. He will continue to lead Aluminium
while a robust process to identify his successor is undertaken but
has stepped down from the Group’s executive committee.
- We saw a cash outflow from an increase in working capital of
circa $0.9 billion in the first half of 2023, reflecting a build in
blasted and mine stocks in the Pilbara to support overall system
health, and higher spares and stores (including seasonality due to
the Diavik winter road). Payables were also lower due to the timing
of spend, and normal volatility in amounts due to JV partners and
employees. Operating cash flow was also impacted by lower dividends
from Escondida during the first half ($0.3 billion in H1 2023; $0.6
billion in H1 2022).
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
1The NRS Mineral Resources and Ore Reserves, together with the
Lower Commercial Skarn (LCS) Mineral Resources and Ore Reserves,
form the Underground Skarns Mineral Resources and Ore Reserves.
2This production target for 2023 to 2033 is underpinned 25% by
Probable Ore Reserves, 9% by Indicated Resources, and 66% by
Inferred Resources. Mined copper is reported as total recoverable
metal. These estimates of Mineral Resources and Ore Reserves were
reported in a release dated 20 June 2023 titled “Rio Tinto
Kennecott Mineral Resources and Ore Reserves” (Table 1 Release)
which is available on Rio Tinto's website at resources &
reserves (riotinto.com) 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) and the ASX Listing Rules.
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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