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.”
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.