Rio Tinto's mixed results - weak copper production, but more iron ore shipped

Cornelia Mascio
Ottobre 17, 2017

Titanium dioxide slag production increased by 23 per cent compared to the third quarter of 2016, reflecting higher market demand. Third party shipments for the third quarter were 8.2 million tonnes.

It is the second time this year that Rio has downgraded copper guidance, and the new target is well below original forecasts that the company could produce as much as 665,000 tonnes of the red metal this year.

After a slow start to 2017, the miner's Western Australian iron ore division finally kicked into gear, shipping 85.8 million tonnes in the three months ended September 30.

Chief Executive J-S Jacques said "The business performed very well in the September quarter, with a strong quarterly production performance and a wave of productivity improvements embedded through our operations".

"In particular, we are making good progress with further improvements to our world-class Pilbara iron ore business, including the opening of the Silvergrass mine [in August] and the implementation of AutoHaul [Rio Tinto's automated train system]".

Meantime, its bauxite production guidance was revised higher to 50 to 51 million tonnes (previously 48 to 50 million tonnes).

This is lower than what it fetched between July and September (when the commodity averaged about $US71 per tonne).

The Anglo-Australian giant blamed lower copper head grades at the Rio Tinto Kennecott mine in the USA and its Oyu Tolgoi copper-gold operation in Mongolia for the miss.

The first was a seven-week strike at its Escondida copper mine in Chile - co-owned with BHP - which delayed its expansion plans.

The performance has been stronger at Rio's expanding bauxite empire in northern Australia, where the 12.9 million tonnes produced in the quarter was better than the 12.2 million tonnes expected by UBS.

The other was a fall in grades at its Kennecott mine in Utah (from 0.47pc to 0.29pc copper).

The story in copper was less positive, with Rio forced to downgrade annual guidance from between 500,000 and 550,000 tonnes to between 460,000 and 480,000 tonnes.

The bulk commodity was fetching $US62.94 per tonne on Tuesday morning.

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