Rio Tinto 2018 Iron Ore Shipments Up; Forecasts Further Rise This Year

   By Rhiannon Hoyle 
 

SYDNEY--Rio Tinto PLC (RIO.AU) shipped more iron ore from its Australian mining operations in 2018 as it increased output from its newest mine and worked others harder, and forecast a further rise in exports in the year ahead.

Rio Tinto, one of the world's biggest mining companies and top exporters of steel ingredient iron ore, has continued to raise output after a multiyear expansion, betting it can make strong margins over the long run from a market it relies on for the bulk of its earnings.

The miner said it shipped 338.2 million metric tons of iron ore from its pits in the remote Pilbara region in northwest Australia last year, up 2% on 2017. Exports were in line with an earlier forecast from the company, which in October predicted shipments in the upper end of a 330-340 million ton range.

Rio Tinto's iron-ore production was aided by an ongoing productivity drive, good weather conditions and rising production from its new Silvergrass mine, where it began mining in 2017. It did face some disruptions during the third quarter from maintenance work and the death of a truck operator at one of the company's pits.

The miner said it expects a further rise in sales in 2019, forecasting shipments from its Pilbara mines of between 338 and 350 million tons. Australia's Pilbara is the origin of more than half the world's iron-ore trade by sea.

The company will next year start construction of a US$2.6 billion iron-ore mine that will be the miner's most high-tech operation to date and buoy future production as older pits are depleted.

Rio Tinto has spent billions of dollars expanding its vast iron-ore mining network in a bet on continued strong demand for the steelmaking commodity in Asia. To fatten profits from its biggest division, the Anglo-Australian miner has also sought to make existing mines more productive, including through the use of autonomous equipment.

Rio Tinto typically earns a margin of more than 60% from its iron ore business.

This month the company had to declare force majeure on some iron-ore contracts after a fire at its Australian port facilities.

A fire broke out at the Cape Lambert port in Western Australia state on Jan. 10, causing damage to a section of the plant that separates its Robe Valley lump and fine products.

Rio Tinto earlier this week said it would try to minimize disruption to customers. It said setbacks because of the fire are factored into its 2019 projections.

Rio Tinto on Tuesday also reported a 1% year-on-year fall in output of bauxite, the raw ingredient in aluminum, despite recent measures implemented to reduce bottlenecks at its Gove operations.

Aluminum production fell by 3% on a year ago, while mined copper output surged 33%. The jump in copper production reflected rising output from all of its copper mines, particularly the large Kennecott and Escondida operations.

Write to Rhiannon Hoyle at [e-mail]

(END) Dow Jones Newswires

January 17, 2019 17:09 ET (22:09 GMT)

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