Rio Tinto’s flagship iron ore business in Western Australia bounced back in the third quarter, reporting a 10 per cent increase in production of the key steelmaking ingredient.
The London-based miner said it churned out 87.3m tonnes of iron ore in the three months, up from 79.7m in the previous quarter.
“Our increased focus on waste material movement and pit development will continue over 2019 and 2020 to improve mine performance and pit sequencing,” Rio said a trading update.
Rio shocked the market in June when it lowered guidance again for its most important commodity, blaming “operational” challenges at one of its key mining hubs in the Pilbara region.
This resulted in the company producing too much low grade material that could not be used in its flagship Pilbara blend product, which is popular with Chinese steel mills. This led to a review of its mine plans and the production downgrade.
In Tuesday’s trading update Rio said it had recovered from the problems that it had experienced earlier in the year. Pilbara iron ore shipments reached 86.1m tonnes, a result that was ahead of market forecast.
“The market has been concerned about Rio’s iron ore business given three downgrades to 2019 guidance this year. So it was good to see the business running at (an annualised rate of) 346m tonnes which is in line with our 2020 estimate,” said analysts at UBS. “The market will now turn its gaze to Rio’s Capital Markets Day on 31 Oct where Rio has said it will provide 2020 guidance.”
Less positive was the news from its aluminium business where Rio lowered forecasts for alumina and bauxite — the two minerals needed to make the lightweight metal — citing a number of factors including lower output from its Pacific Aluminium unit smelters.
“The aluminium industry continues to face challenging conditions in global markets and policy uncertainty, reflected in declining prices. We are focusing on enhancing the competitiveness of our smelters, including discussions with our Pacific stakeholders on energy pricing, to ensure the sustainability and global competitiveness of our Pacific smelters,” Rio said.
On Oyu Tolgoi, Rio’s giant underground copper project in the Mongolian desert, the company said work “continues on the mine redesign”.
In July, Rio said difficult ground conditions meant that it would have to rethink the design and development schedule at Oyu Tolgoi. As a result, the project is going to be delayed by up to 30 months while the cost of the $5.3bn project will increase by $1.2bn to $1.9bn.
At OT’s existing open pit, production was 27 per cent lower than the prior quarter as mining activity moved to lower grade areas of the deposit, underlining the importance of getting the underground project completed. Mined copper grade was 0.37 per cent.
Fonte: Financial Times
