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Rio Tinto's Q3 iron ore output slips 3% YOY; copper production up 32%

Rio Tinto's third-quarter iron ore production and shipments slipped 3% and 5% year over year to 82.5 million tonnes and 81.9 million tonnes, respectively.

Iron ore production was affected due to planned maintenance cycles and safety pauses across all operations following a fatality at the company's Paraburdoo iron ore mine in Western Australia, according to Oct. 16 results.

Meanwhile, mined copper output in the period surged 32% year over year to 159,700 tonnes on the back of increased production from Kennecott Utah Copper Corp. due to higher grades.

The company's bauxite production totaled 12.7 million tonnes, down 1% as strong performance at the Weipa project in Queensland was offset by lower production at the Sangaredi mine in Guinea and the Porto Trombetas mine in Brazil.

Rio Tinto's share of bauxite output for the year is now expected to range between 50 million and 51 million tonnes, compared to between 49 million and 51 million tonnes previously.

Aluminum output also saw a 1% decline to 880,000 tonnes in the period, mainly due to ongoing labor disruptions at the Becancour smelter in Canada. Accordingly, the company slashed its full-year guidance to between 3.4 million and 3.5 million tonnes from between 3.5 million and 3.7 million tonnes previously.

Iron ore pellets and concentrate output from the company's majority-owned Iron Ore Co. of Canada Inc.'s IOC operations in Labrador slipped 9% to about 2.9 million tonnes, while titanium dioxide slag output also registered a 9% yearly decline to 297,000 tonnes.

Hard coking coal output dipped 68% to 712,000 tonnes, with thermal coal output dropped 63% to 397,000 tonnes in the quarter. Production of coal attributable to Rio Tinto ceased following the sale of its interests in Kestrel and Hail Creek on Aug. 1.

Full-year coal production forecast stands at 4.0 million tonnes of hard coking coal and 2.5 million tonnes of thermal coal, reflecting the asset disposals.

Diamond production from Rio Tinto's Argyle mine in Western Australia and its 60%-owned Diavik mine in Canada's Northwest Territories during the quarter fell 19% and 9% to 3.8 million carats and 1.1 million carats, respectively.

As previously reported, increasing raw materials prices would affect the company's EBITDA by US$400 million in 2018 against the year-ago total. In addition, higher thermal coal prices are expected to have a negative impact of US$100 million for its Pacific Aluminium Pty. Ltd. smelters.

Meanwhile, Rio Tinto took a US$178 million hit to its EBITDA from old alumina supply contracts in the first half, and a further negative impact totaling US$130 million in the third quarter.

Rio Tinto CEO Jean-Sébastien Jacques, however, committed to delivering "superior returns to our shareholders in the short, medium and long-term" as the company pursues opportunities to improve productivity and drive enhanced cash flow generation.