Rio Tinto chief executive J-S Jacques said “We finished the year
with good momentum, particularly in our Pilbara iron ore operations
and in bauxite, despite having experienced some operational
challenges in 2019. We are increasing our investment, with $2.25
billion of high-return projects in iron ore and copper approved in
the fourth quarter. We also boosted our exploration and evaluation
expenditure to $624 million in 2019, further strengthening our
pipeline of opportunities.
“We have the platform and performance to maintain our delivery
of superior returns to shareholders over the short, medium and
long-term, driven by our strong value over volume approach and
ongoing disciplined allocation of capital.”
Q4 2019
vs Q4 2018
vs Q3 2019
2019
vs 2018
Pilbara iron ore shipments (100%
basis)
Mt
86.8
-1%
+1%
327.4
-3%
Pilbara iron ore production (100%
basis)
Mt
83.6
-3%
-4%
326.7
-3%
Bauxite
Mt
15.1
+28%
+10%
55.1
+9%
Aluminium
kt
783
-4%
-1%
3,171
-2%
Mined copper
kt
138.7
-9%
-12%
577.4
-5%
Titanium dioxide slag
kt
286
-3%
-11%
1,206
+8%
IOC iron ore pellets and concentrate
Mt
2.6
-10%
-13%
10.5
+18%
Operational update
•
Pilbara iron ore shipments of 327 million
tonnes (100% basis) were 3% lower than 2018, primarily impacted by
weather and operational challenges in the first half of 2019 and
our active decision to protect the quality of the Pilbara Blend. In
addition to direct sales from Australia, we commenced trials of
portside trading in October 2019.
•
On 27 November 2019, we announced a $749
million investment in the Greater Tom Price operations (Western
Turner Syncline Phase 2) in the Pilbara region of Western
Australia, to sustain production capacity.
•
Bauxite production of 55 million tonnes
was 9% higher than 2018, underpinned by the successful ramp-up of
the Amrun mine in Queensland, Australia. Third party shipments of
40 million tonnes were 21% higher than 2018.
•
Aluminium production of 3.2 million tonnes
was 2% lower than 2018, primarily reflecting a preventive safety
shutdown of one of the three pot-lines at ISAL in Iceland and
earlier than planned pot relining at Kitimat in British Columbia,
Canada in the second half.
•
On 23 October 2019, we announced a
strategic review of our interest in the Tiwai Point aluminium
smelter in New Zealand, to be completed in the first quarter of
2020.
•
On 3 December 2019, we announced the
approval of a $1.5 billion investment at Kennecott in the US, phase
two of the south wall pushback project, extending operations to
2032.
•
Mined copper production of 577 thousand
tonnes was 5% lower than 2018, reflecting lower copper grades,
partially offset by higher throughput. Lower copper grades at
Kennecott impacted the fourth quarter in particular: this is
expected to persist until we access higher grades from the end of
2020, resulting from phase one of the south wall pushback
project.
•
Following the signing of renewable power
agreements in Chile, Escondida has raised a provision related to
the cancellation of existing coal contracts. We have recognised a
charge of approximately $200 million against 2019 underlying
EBITDA.
•
At the Oyu Tolgoi underground project in
Mongolia, we completed the primary production shaft (shaft 2) in
October. Work continued on the mine design and, overall we remain
within the cost and schedule ranges as announced in July 2019. We
continue to expect to complete the mine design in the first half of
2020 and the Definitive Estimate of cost and schedule in the second
half of 2020.
•
Titanium dioxide slag production of 1.2
million tonnes was 8% higher than 2018, reflecting continued
operational improvement and the restart of furnaces in line with
market conditions. Fourth quarter production was impacted by the
curtailment of operations at Richards Bay Minerals (RBM) in South
Africa, following an escalation in violence in the surrounding
communities. A phased restart commenced at the end of December.
•
Production of pellets and concentrate at
the Iron Ore Company of Canada (IOC) was 18% higher than 2018, when
strike action occurred. Fourth quarter production was 10% lower
than the same quarter of 2018 due to unplanned equipment-related
downtime.
•
On 18 November 2019, we announced that we
would support Energy Resources of Australia Limited’s (ERA) plans
for a renounceable entitlement offer to raise $324 million for the
rehabilitation of the Ranger Project Area in Australia’s Northern
Territory.
•
Exploration and evaluation spend in 2019
was $624 million, 28% higher than 2018, primarily reflecting
increased activity at Resolution Copper in the US and on the Winu
and Falcon advanced projects in Australia and Canada. We achieved a
major permitting milestone at Resolution with the release of an
independently prepared Draft Environmental Impact Statement in
August 2019.
•
In 2019, we repurchased approximately $1.6
billion of Rio Tinto plc shares (28.4 million) on-market.
Average realised prices
2019
vs 2018
Pilbara iron ore
$/wmt, FOB
79.0
+37%
Aluminium
$/t (including VAP, mid-west
premium)
2,132
-14%
Copper
US cents per lb
274.5
-7%
2020 production guidance (Rio Tinto
share, unless otherwise stated)
2019 actual
2020 guidance
Pilbara iron ore (shipments, 100%
basis)
327.4 Mt
330 to 343 Mt
Bauxite
55.1Mt
55 to 58 Mt
Alumina
7.7 Mt
7.8 to 8.2 Mt
Aluminium
3.2 Mt
3.1 to 3.3 Mt
Mined copper
577 kt
530 to 570 kt
Refined copper
260 kt
205 to 235 kt
Diamonds
17 M carats
12 to 14 M carats
Titanium dioxide slag
1.2 Mt
1.2 to 1.4 Mt
IOC pellets and concentrate
10.5 Mt
10.5 to 12.0 Mt
Boric oxide equivalent
0.5 Mt
~0.5 Mt
•
Our guidance is framed by expectations of
general stability in global GDP growth in 2020, tempered by
negative risks, including geopolitical tensions and oil price
volatility. In this environment, we will continue to monitor and
adjust production levels and product mix to meet customer
requirements in 2020, in line with our value over volume
strategy.
•
Iron ore shipments and bauxite production
guidance are subject to weather and market conditions.
•
Aluminium guidance reflects a continued
focus on capacity creep, offset by earlier than planned pot
relining at Kitimat.
•
Mined copper guidance reflects lower
grades at Kennecott as mining transitions from the east to south
wall. We expect to access higher, more consistent grade ore from
late 2020.
•
Diamonds guidance reflects the expected
closure of Argyle in the fourth quarter of 2020 and lower grades at
Diavik.
•
Titanium dioxide slag guidance assumes
return to normal operations at RBM in early 2020.
The full fourth quarter production results are available
here
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. To allow production
numbers to be compared on a like-for-like basis, production from
asset divestments completed in 2018 is excluded from Rio Tinto
share of production data.
This announcement is authorised for release to the market by 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
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200116005838/en/
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