Rio Tinto releases solid fourth quarter production, sets iron ore record
Rio Tinto unveiled its fourth quarter production results yesterday, revealing iron ore production in 2015 increased 11 percent from the previous year--a new record.
Global iron ore shipments were in line with 2015 full year guidance of around 340 million tons. The strong second half performance was achieved following completion of the brownfield developments and expanded infrastructure in the Pilbara, enabling a drawdown of inventories, as well as improvements at Iron Ore Company of Canada.
For Rio Tinto, global iron ore production in 2016 is expected to be around 350 million tons.
“Against a challenging market backdrop for the industry, Rio Tinto remains focused on operating and commercial excellence to leverage the low-cost position of our Tier 1 asset base,” Rio Tinto Chief Executive Sam Walsh said.
“In 2015, we delivered efficient production, meeting our targets across all of our major products, while rigorously controlling our cost base. We will continue to focus on disciplined management of costs and capital to maximize cash flow generation throughout 2016.”
Rio Tinto continued a strong performance in bauxite, exceeding its full year guidance of 43 million tons, with record third-party shipments of 26.6 million tons.
Aluminium production was in line with 2014, with record annual production at nine smelters offsetting lower production from Kitimat as the modernized and expanded smelter was commissioned.
Mined copper production was in line with full year guidance of 510,000 tons as de-weighting and de-watering activities at Kennecott resulted in lower production in 2015, which was partly offset by a 36 percent increase in production at Oyu Tolgoi from higher grades and throughput. Production is expected to increase in 2016, with higher production at Kennecott and an expected share of joint venture production at Grasberg.
Rio Tinto’s share of hard coking and thermal coal production was in line with 2015 guidance, while semi-soft coking coal production was seven per cent above the top end of the guidance range due to mine sequencing.
Diamonds & Minerals continues to optimize production to align with market demand, reflected in a 25 percent reduction in titanium dioxide slag production compared to 2014, in line with guidance.
Last week, Walsh acknowledged the challenging commodities market and said it would freeze salaries for all staff in 2016. “The pressure this is placing on our industry is significant and it is a tough time across the sector,” Walsh said. “It is important we recognize that the pressure isn’t going to let up. This situation is not temporary.”
Copper production from top ten companies to increase by 3.8%
Copper production from the world’s top companies is set to increase by up to 3.8% this year, following a fall of 0.2% in 2020, GlobalData analysis reveals. Last year’s marginal slump saw production drop to 11.76 million tonnes (Mt).
The initial impact of the COVID-19 pandemic on mining operations was immense, however, six of the ten largest copper producers succeeded in increasing output last year. In 2021, copper production from the top ten copper companies is expected to bounce back, rising by up to 3.8%, to reach 12.2Mt, according to GlobalData, a leading data and analytics company.
The highest increase in copper production was by Canada’s First Quantum, which, despite all the challenges, reported 10.4% growth in 2020. The company’s Sentinel mine in Zambia and Cobre Panama were key contributors to this growth. While the latter remained under care and maintenance between April and August 2020, it delivered record production levels during the subsequent months.
Codelco, the world’s largest producer of the red metal used in electric vehicles, also bucked the trend.
Vinneth Bajaj, Associate Project Manager at GlobalData, commented: “Despite Codelco reporting over 3,400 active cases during July 2020, the company achieved 1.2% growth in its production in 2020. The company implemented a four-phase plan, as part of the COVID-19 measures, to ensure the health and safety of its employees, while also avoiding any significant impact to its copper output.”
Although the overall impact was minimal, declines in production were observed from Glencore (8.2%), Antofagasta (4.7%), BHP (3.9%) and Freeport McMoRan (1.3%). Reduced operational workforces due to COVID-19 measures, lower ore grades and production halts due to maintenance were the key disruptors to output during 2020.
The move towards electric vehicles and clean energy from renewables sources such as solar panels and wind turbines has driven the copper price to all-time highs. Copper has been among the best performers over the last month where metals ranging from aluminum to iron ore have surged to their highest prices in years. The rally is being fueled by stimulus measures, near-zero interest rates and signs that economies are recovering from the global pandemic.