Rio Tinto has reported strong Pilbara iron ore production and upped its annual guidance while also disclosing a doubling in its spend on evaluation of projects in other sectors.
Rio Tinto has reported strong Pilbara iron ore production and upped its annual guidance while also disclosing a doubling in its spend on evaluation of projects in other sectors.
The mining giant said its Pilbara iron ore operations produced 81.3 million tonnes in the June quarter, 3 per cent higher than the same quarter of 2022.
This was helped by its new Gudai-Darri mine achieving sustained nameplate capacity.
Shipments were 79.1mt, down 1 per cent, reflecting the impact of planned maintenance at the Dampier port and a train derailment in June.
Rio said continued operational improvements across the Pilbara meant full-year shipments were now expected to be in the upper half of the original 320mt to 335mt range.
The group is continuing to make big investments to sustain its Pilbara operations but is also spending a lot more in new geographies and other commodities.
Its exploration and evaluation expense in the first half of 2023 was $US710 million, up 94 per cent on the same period last year.
This included a ramp up on spending at the Simandou iron ore project in Africa and the Rincon lithium project in Argentina.
Rio spent $US318 million at Simandou in the first half, mainly on accommodation camps, earthworks and geotechnical drilling, even as legal negotiations with its partners continued.
The company spent $112 million on battery metals during the first half, including at Rincon.
Rio is building a lithium carbonate starter plant as exploration and studies on a full-scale operation continue.
At the Resolution copper project in Arizona, Rio spent $68 million as it continued planning for the mine while also seeking to reach agreement with several Native American tribes.
Similarly, at the Winu copper project in the Pilbara, Rio spent $32 million on drilling, fieldwork and study activities while it continued negotiations with the traditional owners.
In the Pilbara iron ore business, Rio said construction of its next big mine, Western Range, continued in line with schedule.
It is also progressing studies on its next tranche of Pilbara mines, which include Hope Downs 1 Sustaining (aka Hope Downs 2 and Bedded Hilltop), Brockman 4 Sustaining, Greater Nammuldi and West Angelas Sustaining.
The good news on iron ore was partly offset by a downgrade of expected copper production.
The group benefited from the continued ramp up of the high-grade underground mine at Oyu Tolgoi in Mongolia, but its Kennecott concentrator in the US is continuing to operate at reduced rates as Rio deals with the effects of a conveyor failure in March.
It was also affected by unplanned maintenance and lower crusher and conveyor availability at its Escondida mine in Chile.
Refined copper guidance has been reduced to between 160,000 and 190,000 tonnes (previously 180,000-210,000t) and its copper C1 cost guidance has been increased.
At the Rincon lithium project in Argentina, the $140 million estimate and schedule to develop the starter plant remains under review in response to cost escalation.
Chief Executive Jakob Stausholm acknowledged a mixed performance across the group’s portfolio.
“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,” Mr Stausholm said.
“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.”
