Mining giant Rio Tinto produced 85.5 million mt of iron ore in the April-June quarter, up 7% year on year and up 3% quarter on quarter, the company said Tuesday in its quarterly report.
Exports for the period totaled 88.5 million mt, up 14% from a year earlier and up 10% from January-March.
Rio Tinto attributed the increase to more favorable weather conditions in the June quarter this year than last year in the Pilbara region of Western Australia, the ramp-up of production at its Silvergrass mine and ongoing productivity improvements.
The Silvergrass mine, which officially opened last August, is expected to add 10 million mt/year to Rio Tinto’s production capacity.
The company said it remained on target to hit the upper end of its iron ore shipment guidance range for 2018 of 330 million-340 million mt.
Of Rio’s 71.5 million mt share of its June quarter production, 21.9 million mt was Pilbara Blend Lump (up 11% on year, up 6% on quarter), 31.2 million mt Pilbara Blend Fines (up 11% on year, up 5% on quarter), 1.4 million mt Robe Valley Lump (down 2% on year, down 10% on quarter), 2.6 million mt Robe Valley Fines (up 18% on year, down 15% on quarter) and 14.3 million mt Yandicoogina Fines (up 6% on year, up 3% on quarter), the results showed.
The company’s average realized sales price over January-June was $57.90/wet mt on an FOB basis, equating to $63/dry mt. Its full year price over 2017 was $59.60/wmt, or $64.80/dmt.
About 17% of sales in the June quarter were priced by reference to the prior quarter’s average index lagged by one month. The remainder was sold either on a current quarter average, current month average or in the spot market, Rio Tinto said.
JP Morgan in a research note Tuesday said Rio Tinto’s iron ore exports in the June quarter beat its expectations of 85.3 million mt by 4%, while the achieved price was below its estimate of $59.10/wmt.
IOC GUIDANCE CUT FURTHER
Rio Tinto in the report lowered 2018 production guidance for its Iron Ore Company of Canada unit due to industrial action to 9 million-10 million mt of iron ore pellets and concentrates, from 10.3 million-11.3 million mt in an earlier statement and 11.5 million-12.5 million mt earlier in the year.
IOC’s operations were suspended on March 27 amid negotiations with the unionized workforce, and a new labor agreement reached in the June quarter. Workers returned to work on May 28 and IOC had ramped up to normal production rates by the end of the June quarter, Rio Tinto said.
Rio’s share of IOC’s pellet and concentrate production was 900,000 mt in April-June, down 68% on year and down 63% on quarter, the company said.
Source: PlattsPrevious Next