Rio Tinto Q4 Iron Ore Shipments Rise; Backs 2017 Production & Shipments Guidance

(RTTNews) - Anglo-Australian mining giant Rio Tinto Plc (RTNTF, RIO, RIO.L, RTPPF) reported that Pilbara iron ore production for the fourth-quarter increased 4 percent, while iron ore shipments rose 1 percent. Production and shipments guidance for 2017 remains unchanged.

Rio Tinto chief executive J-S Jacques said "We have delivered a strong operational performance in 2016, underpinned by our drive for efficiency and maximising cash flow. Our disciplined approach remains in place in 2017, with the continued focus on productivity, cost reduction and commercial excellence. This will ensure that we continue to deliver value for our shareholders."

Rio Tinto's Pilbara shipments in 2017 are expected to be between 330 and 340 million tonnes (100 per cent basis), subject to weather conditions.

Rio Tinto's share of production in 2017 is expected to be 48 to 50 million tonnes of bauxite, 8.0 to 8.2 million tonnes of alumina and 3.5 to 3.7 million tonnes of aluminium.

In 2017, Rio Tinto's share of mined copper production is expected to be between 525 and 665 thousand tonnes, with higher production at Escondida, and an expected share of joint venture production at Grasberg. Refined copper production is expected to be between 185 and 225 thousand tonnes. Diamond production guidance for 2017 is 19 to 24 million carats.

Rio Tinto, the world's second-largest iron-ore producer, said its Pilbara iron ore production for the fourth-quarter increased 4 percent year-over-year to 85.5 million tons, while Rio Tinto's share was 70.9 million tonnes.

Pilbara iron ore shipments for the quarter rose 1 percent to 87.7 million tons. Sales in the quarter exceeded production by 2.2 million tonnes, primarily drawing down on inventories built at the ports in the third quarter due to maintenance.

Pilbara operations produced 329.5 million tonnes (Rio Tinto share 270.7 million tonnes) in 2016, six per cent higher than in 2015. The strong production performance in 2016 was attributable to the ramp-up of expanded mines, operational productivity improvements and minimal disruption from weather events.

Sales of 327.6 million tonnes (Rio Tinto share 268.9 million tonnes) in 2016 were three per cent higher than 2015, attributable to the newly expanded infrastructure and minimal disruption from weather events.

Hard coking coal production was four per cent higher in 2016 and fourth quarter volumes were 15 per cent higher than the same quarter of 2015 due to longwall and plant outperformance at Kestrel.

Bauxite production of 47.7 million tonnes during 2016 was nine per cent higher than 2015. Annual production records were achieved at Weipa (up six per cent), benefiting from increased plant throughput, as well as at Gove (up 21 per cent) through system improvements. The strong production performance and healthy demand from China enabled the Group to ship 29.3 million tonnes to third parties in 2016, ten per cent higher than 2015, whilst fourth quarter shipments were 12 per cent higher than the corresponding quarter in 2015.

Alumina production for 2016 increased five per cent compared with 2015, primarily due to operational improvements driving record production at the Yarwun refinery (up 11 per cent). The Jonquière and Alumar refineries also achieved record annual production.

Aluminium production was ten per cent higher in 2016, due largely to Kitimat, which produced at nameplate capacity for a third consecutive quarter. Record annual production was achieved at ten smelters, whilst quarterly production records at seven smelters resulted in a seven per cent increase in production compared with the corresponding period in 2015.

Mined copper production in 2016 was significantly higher than 2015 as mining progressed through an area of higher grades. Whilst fourth quarter production was 25 per cent higher than the previous quarter, it was below expectations due to lower throughput following reduced pit access at Bingham Canyon. The higher mined production in 2016 resulted in improved refined copper production of 156.5 thousand tonnes, up 36 per cent.

At Argyle, 2016 carat production was four per cent higher than 2015 following the ramp-up of the underground mine, with higher ore throughput partially offset by a lower recovered grade. Likewise at Diavik, carats recovered in 2016 were four per cent higher than 2015 due to higher ore throughput offsetting lower grades.