Rio Tinto revises 2018 target for Canadian iron ore operations

Rio Tinto expects to see a further drop in its Canadian iron ore pellet and concentrate output this year, but is maintaining the guidance for its Australian iron ore and coking coal operations.

Iron Ore Company of Canada
Rio Tinto 58.7%-owned Iron Ore Company of Canada (IOC) sold 449,000 tonnes of pellets and concentrate in the three months to June, down 89% both from a year earlier (4.14 million tonnes) as well as the first quarter of 2018 (3.951 million tonnes), it said in its quarterly production update on Tuesday.

Output in the second quarter of this year totaled 1.48 million tonnes, down 68% from 4.57 million tonnes in the same quarter in 2017.

The drastic fall was mainly due to production suspensions between March 27 and May 28 amid industrial action by local workers.

Rio Tinto has since trimmed its full-year guidance for its share of production at IOC in 2018 to 9-10 million tonnes of pellets and concentrates, down from its previous guidance of 10.3-11.3 million tonnes.

The new goal equates to 15.3-17 million tonnes on a 100% basis, according to Metal Bulletin calculations.

Pilbara iron ore
In Australia, the miner shipped 88.5 million tonnes of iron ore on a 100% basis from its Pilbara operations in Western Australia in the June quarter, up 14% from a year earlier and 10% higher than shipments made in the first quarter of 2018.

Its output in the April-June period also rose 7% year on year to 85.5 million tonnes, compared with 79.8 million tonnes in the same period of last year. This is also 3% higher than the 83.1 million tonnes produced in the first quarter of 2018.

Rio Tinto attributed the increases to better weather, the ramp-up of its Silvergrass project, and ongoing productivity improvements.

Shipments in the first half of 2018 totaled 168.8 million tonnes, 9% higher than the 154.3 million tonne shipped in the second quarter of 2017.

The miner is expecting full-year sales from Pilbara to be at the upper end of its guidance of 330-340 million tonnes, which remains unchanged.

Rio Tinto said it had achieved an average price of $57.90 per wet metric tonne (wmt) fob Australia – or $63 per dry metric tonne (dmt) – in the first six months of 2018, down from an average of $59.60 per wmt – or $64.80 per dmt – for 2017.

Coking coal
Rio Tinto produced 2.17 million tonnes of hard coking coal in the April-June quarter at its Queensland operations, up 40% year on year from 1.55 million tonnes in the second quarter of 2017, which it attributed to the recovery from the impact of Cyclone Debbie a year earlier on the Australian state.

Its output in the second quarter of this year is also nearly twice the 1.1 million tonnes produced in the first quarter. It said this was due to mine resequencing at Hail Creek, and a longwall changeover and maintenance works at Kestrel during the first three months of the year.

The miner is maintaining its output guidance for hard coking coal at 7.5-8.5 million tonnes for the whole year.