Rio Tinto releases second quarter production results

Rio Tinto chief executive J-S Jacques said "We saw a challenging operational performance across our portfolio in the first half, while also investing in future growth at Richards Bay Minerals and Resolution. Whilst we experienced operational and weather issues at our iron ore operations in Australia, pricing and market demand has remained robust. We remain focused on safely improving and optimising the performance and productivity of our assets in order to drive future cash flow. This, combined with our value over volume strategy and the disciplined allocation of capital, will continue to deliver superior returns to our shareholders in the short, medium and long term."

Operational update

• Pilbara iron ore shipments of 85.4 million tonnes (100% basis) in the second quarter were 3% lower than the second quarter of 2018. Shipments were impacted in April due to recovery works following Tropical Cyclone Veronica.
• 2019 guidance for Pilbara shipments was revised on 19 June 2019 to between 320 and 330 million tonnes, 100% basis (previously between 333 and 343 million tonnes) due to mine operational challenges. Unit cost guidance has been revised to $14 - $15 per tonne (previously $13 - $14 per tonne).
• Lower iron ore production was the primary driver of a 2% reduction in copper equivalent production in the first half compared to the corresponding period of 2018.
• Bauxite production of 13.4 million tonnes in the second quarter was 1% higher than the same period of 2018.
• Aluminium production of 0.8 million tonnes was in line with the second quarter of 2018.
• Mined copper production of 137 thousand tonnes was 13% lower than the second quarter of 2018, with lower production from Escondida and Kennecott reflective of lower grades.
• Titanium dioxide slag production of 303 thousand tonnes was 31% higher than the second quarter of 2018, reflecting improved operational performance following operational challenges faced in the corresponding period of 2018.
• Second quarter production at Iron Ore Company of Canada was significantly higher than the corresponding quarter of 2018, which was impacted by a labour strike. However, guidance for Rio Tinto’s share of iron ore pellets and concentrate production is revised to between 10.7 and 11.3 million tonnes (previously 11.3 to 12.3 million tonnes), due to adverse weather conditions in the first quarter and a flooding incident in June.
• Rio Tinto today released a separate announcement providing an update on the Oyu Tolgoi underground project.
• On 8 April 2019, Rio Tinto announced the approval of the construction of the Zulti South project at Richards Bay Minerals (RBM) in South Africa for $463 million (Rio Tinto share $343 million).
• On 15 April 2019, Rio Tinto announced it had committed $302 million ($166 million Rio Tinto share) of additional expenditure to advance its Resolution Copper project in Arizona.

All figures in this report are unaudited. All currency figures in this report are US dollars, and comments refer to Rio Tinto’s share of production, unless otherwise stated. To allow production numbers to be compared on a like-for-like basis, production from asset divestments completed in 2018 is excluded from Rio Tinto share of production data.