Rio Tinto PLC RIO exported more cargoes of iron ore in 2016 as it continued to ratchet up production from a recently expanded network of mines in a remote part of Australia.
The Anglo-Australian company on Tuesday reported iron-ore shipments of 327.6 million metric tons from its Western Australia mining operations during the year, up 3% on 2015. That was in line with a company projection in October that it would ship between 325 million and 330 million tons from Australia in 2016.
Miners including Rio Tinto and Anglo-Australian rival BHP Billiton Ltd. (BHP.AU) poured billions of dollars into massive expansions of their Australian mining operations over the past decade as China’s economy grew rapidly, demanding greater volumes of the steelmaking ingredient for skyscrapers, bridges and other infrastructure.
Now, three in every five tons of iron ore traded by sea come from Australia’s vast Pilbara region. Rio Tinto and BHP are the world’s No. 2 and No. 3 exporters of iron ore, respectively. Brazil’s Vale SA is the largest global supplier.
Rio Tinto stuck to an earlier forecast that shipments from Australia should increase to between 330 million and 340 million tons this year, higher than 2016 but lower than once anticipated because of delays to an autonomous railway project.
The company said it will continue in the year ahead to advance its AutoHaul project that will see driverless trains snake from mine to port through the Pilbara, but with a driver remaining on board until it is satisfied the system is safe and reliable.
Rio Tinto also has a majority stake in an iron-ore operation in Canada, Iron Ore Company of Canada, where its share of output in 2016 increased 3% on-year to 10.7 million tons.
Iron ore prices have steadied around US$80 a ton, down from a peak around US$190 a ton in 2011, in the heady days of the mining boom, but up from as low as US$37 a little over a year ago. At the same time, Rio Tinto has been doubling down on its push to cut costs in the business that has included increasing utilization of trucks and plant and reworking deals with suppliers.
Chief Executive Jean-Sébastien Jacques said Rio Tinto’s focus in 2017 will remain on productivity and cost reduction. “This will ensure that we continue to deliver value for our shareholders,” he said.
The miner said on Tuesday that full-year production of other commodities including copper and coal, two other important commodities for company earnings, were mostly higher.
Annual production of copper was up 4% at 523,300 tons, although this missed prior guidance partly due to lower-than-expected volumes from its Kennecott mine in the U.S. state of Utah. Hard coking coal output was up 4% on-year, at 8.1 million tons.
Source: MarketWatchPrevious Next