Sydney — Mining giant Rio Tinto expects to see year-on-year increases in both itsiron ore shipments and metallurgical coal production in 2018, the company saidMonday.
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It is expecting to ship 330 million-340 million mt of iron ore next year,which compares to its 2017 guidance of 330 million mt, the company said in aninvestor seminar.
Rio Tinto noted that Chinese environmental policy measures are increasingdemand for higher grade iron ore, which benefits the company's 62% Fe product.
Rival Australian iron ore miner, Fortescue Metals Group's chairman AndrewForrest last week said that his company is going to target future productionof above 60% Fe.
RBC Capital Markets analyst Paul Hissey said the announcement indicatesFMG moving away from the 55% and 58% Fe products which account for the bulk ofthe company's current sales and would see it directly competing with existingpremium ore producers.
"As this is an address from the chairman, we understand the high level ofthe commentary; however, the challenge must surely be as to how FMG is able toachieve this given the existing resources/reserves and installed capitalbase," he added.
Rio Tinto operates in the Pilbara region of Western Australia the world'slargest integrated portfolio of iron ore assets.
Meanwhile, Rio Tinto expects a small increase to its production of ironore pellets and concentrate from its Iron Ore Company of Canada.
Next year, IOC is expected to produce 11.5 million-12.5 million mtcompared to the expectation of 11.4 million-12.4 million mt for 2017, it said.
During the investor seminar, Rio Tinto also announced it is expecting toproduce 7.5 million-8.5 million mt of hard coking coal. That compares to theproduction guidance of 7.2 million-7.8 million mt for 2017.
Rio Tinto operates two coal sites in Queensland, namely the Kestrel andHail Creek mines, which primarily produce high-value coking or metallurgicalcoal.
RIO TINTO APPOINTS NEW CHAIRMAN
On Monday, Rio Tinto also announced that it has appointed former AngloAmerican man Simon Thompson as chairman, who is to succeed Jan du Plessis.
Thompson will become chairman on March 5 as du Plessis steps down on thesame date after serving almost nine years in the role.
Thompson said he looks forward to leading the board and his team toensure the company continues to maintain its capital discipline and"value-over-volume approach."
He has over 20 years' experience working across five continents in themining and metals industry. From 1995 to 2007, he worked for the AngloAmerican group, holding a number of senior positions, including executivedirector. He has been chairman of 3i Group since 2015 and was chairman ofTullow Oil from 2012 to 2017, Rio said.
--Nathan Richardson, firstname.lastname@example.org
--Edited by Irene Tang, email@example.com