Mining giant Rio Tinto expects to see year-on-year increases in both its iron ore shipments and metallurgical coal production in 2018, the company said.
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 an investor seminar.
Rio Tinto noted that Chinese environmental policy measures are increasing demand for higher grade iron ore, which benefits the company’s 62% Fe product.
Rival Australian iron ore miner, Fortescue Metals Group’s chairman Andrew Forrest last week said that his company is going to target future production of above 60% Fe.
RBC Capital Markets analyst Paul Hissey said the announcement indicates FMG moving away from the 55% and 58% Fe products which account for the bulk of the company’s current sales and would see it directly competing with existing premium ore producers.
“As this is an address from the chairman, we understand the high level of the commentary; however, the challenge must surely be as to how FMG is able to achieve this given the existing resources/reserves and installed capital base,” he added.
Rio Tinto operates in the Pilbara region of Western Australia the world’s largest integrated portfolio of iron ore assets.
Meanwhile, Rio Tinto expects a small increase to its production of iron ore pellets and concentrate from its Iron Ore Company of Canada.
Next year, IOC is expected to produce 11.5 million-12.5 million mt compared 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 to produce 7.5 million-8.5 million mt of hard coking coal. That compares to the production guidance of 7.2 million-7.8 million mt for 2017.
Rio Tinto operates two coal sites in Queensland, namely the Kestrel and Hail Creek mines, which primarily produce high-value coking or metallurgical coal.
RIO TINTO APPOINTS NEW CHAIRMAN
On Monday, Rio Tinto also announced that it has appointed former Anglo American 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 the same date after serving almost nine years in the role.
Thompson said he looks forward to leading the board and his team to ensure the company continues to maintain its capital discipline and “value-over-volume approach.”
He has over 20 years’ experience working across five continents in the mining and metals industry. From 1995 to 2007, he worked for the Anglo American group, holding a number of senior positions, including executive director. He has been chairman of 3i Group since 2015 and was chairman of Tullow Oil from 2012 to 2017, Rio said.
Source: PlattsPrevious Next