Rio Tinto releases fourth quarter production results

MELBOURNE, Australia--(BUSINESS WIRE)-- Rio Tinto Chief Executive Jakob Stausholm said “We have delivered a strong safety and operational performance in the face of the significant global challenges of COVID-19. Our 2020 performance reflects the resilience of the business, and the commitment and flexibility of our employees, customers, communities and host governments.

"We are working to restore trust with the Puutu Kunti Kurrama and Pinikura (PKKP) people. Some important progress has been made as set out in the joint statement issued in December following a meeting between the PKKP and Rio Tinto boards. We are also developing additional measures to strengthen our partnerships with Traditional Owners, including a commitment to modernise and improve agreements, particularly in the Pilbara. More broadly, we are determined to improve Rio Tinto’s approach to stakeholder engagement globally by embedding a more inclusive approach that strengthens our overall thinking, decision-making and performance. However, I do not underestimate the time and effort it will take, genuinely working together with our partners, in order for Rio Tinto to drive the changes necessary to help restore trust and rebuild our reputation.

“Safe and well-run operations, together with world-class assets and a strong balance sheet, leave Rio Tinto well placed to generate superior returns for shareholders, invest in sustaining and growing our portfolio, while continuing to pay taxes and royalties in our host communities and make a broader contribution to society, including employment and procurement."

Q4 Operational update

• Our 2020 safety performance was strong, fatality-free for a second year in a row. Health and safety remains our top priority as we maintain use of the critical controls that protect our employees and the local communities with the resurgence of COVID-19 in several regions where we operate. Our all injury frequency rate (AIFR) improved by more than 10% for 2020 versus 2019 (0.42), demonstrating our ability to adapt to changing conditions.

• Pilbara iron ore achieved a strong performance across the network in 2020, despite impacts from Cyclone Damien in the first quarter and COVID-19 disruptions which also resulted in the deferral of maintenance to the second half. Shipments of 330.6 million tonnes (100% basis) were 1% higher than 2019 and production of 333.4 million tonnes (100% basis), 2% higher than 2019. This was underpinned by record total material moved, 7% higher than the previous record in 2019.

• Bauxite production of 56.1 million tonnes was 2% higher than 2019 supported by the ramp-up of the expansion at the CBG mine in Guinea, and steady performance at the Pacific mines.

• Aluminium production of 3.2 million tonnes was in line with 2019, with lower volumes from the curtailment of Line 4 at the Tiwai Point aluminium smelter in New Zealand and from the Kitimat smelter pot relining campaign, offset by the ramp-up of the Becancour smelter in Quebec.

• On 14 January 2021, we announced a new electricity agreement had been reached with Meridian Energy that allows New Zealand’s Aluminium Smelter (NZAS) to continue operating the Tiwai Point aluminium smelter until December, 2024.

• Mined copper was above the guidance range, but 9% lower than 2019 due to lower grades at Kennecott as a result of planned pit sequencing and Oyu Tolgoi production phasing. The commercial and operational teams at Kennecott Utah achieved approximately 60,000 dry metric tonnes of copper concentrate sales in the fourth quarter to partly mitigate the impact of the delayed re-start of the smelter, which became fully operational during October.

• On 16 December, we confirmed the definitive estimate of cost and schedule for Panel 0 of the Oyu Tolgoi underground project in Mongolia, with sustainable production expected to commence in October 2022 and development capital of $6.75 billion¹, in line with previously announced ranges. Rio Tinto considers that additional milestones need to be met in order to ensure that the project can commence caving operations in 2021, including: outstanding government approvals; funding; and, a power solution. Further information can be found in the Investments, growth and development projects section below.

• Titanium dioxide slag production of 1.1 million tonnes was 7% lower than 2019 due to COVID-19 restrictions in Quebec and South Africa, lower market demand and operational disruptions at Richards Bay Minerals (RBM). With the COVID-19 resurgence in Quebec and South Africa, we continue to operate our assets with extensive measures in place to ensure the safety of our employees and communities.

• Production of pellets and concentrate at Iron Ore Company of Canada (IOC) was 1% lower than 2019 due to unplanned maintenance at the processing facilities in the third and fourth quarters. On 3 December, we signed a Reconciliation and Collaboration Agreement with the Innu communities of Uashat mak Mani-utenam and Matimekush-Lac John, re-confirming the long-term partnership between the company and the two communities over the coming decades.

• On 10 December, we disclosed a maiden Ore Reserve and updated Mineral Resource at the 100% owned Jadar lithium-borates project in western Serbia. The Ore Reserve is 16.6 million tonnes at 1.81% Li₂O and 13.4% B₂O₃.² Jadar would be capable of producing approximately 55 thousand tonnes of battery grade lithium carbonate, as well as 160 thousand tonnes of boric acid (B2O3 units) and 255 thousand tonnes of sodium sulfate as by-products per annum.³

• On 17 December, we announced the appointment of Jakob Stausholm as Chief Executive, effective 1 January 2021. Peter Cunningham has been appointed interim Chief Financial Officer, effective 1 January 2021.

• On 15 January 2021, we announced that we have entered the next phase of public comment in the ongoing permitting process at the Resolution Copper Project in Arizona, led by the US Forest Service, with the release of its independently prepared Final Environmental Impact Statement (EIS). The delay in publication of the Final EIS, which was originally scheduled for July 2020 by the Obama Administration, is a result of extensive public consultation, significant interagency coordination and COVID-19 related changes to the pace of work.

The full fourth quarter production results are available here

Footnotes

1 This estimate is at a better than feasibility study level of accuracy.

2 This Ore Reserve estimate was set out in a release to the Australian Securities Exchange (ASX) dated 10 December 2020 “Rio Tinto declares maiden Ore Reserve at Jadar” (ASX release). The Competent Person responsible for the information in the ASX release that relates to Ore Reserves is Mr Allan Earl who is a Fellow of the Australasian Institute of Mining and Metallurgy (FAusIMM). Mr Earl’s assessment is supported from a metallurgical perspective by Mr Gary Davis who is a Member of the Australasian Institute of Mining and Metallurgy (MAusIMM). Rio Tinto confirms that it is not aware of any new information or data that materially affects the information included in the ASX release, that all material assumptions and technical parameters underpinning the estimates in the ASX release continue to apply and have not materially changed, and that the form and context in which the Competent Persons’ findings are presented have not been materially modified.

3 The production targets were previously reported in the ASX release on 10 December 2020. All material assumptions underpinning the production targets continue to apply and have not materially changed.

This announcement is authorised for release to the market by Rio Tinto’s Group Company Secretary.

LEI: 213800YOEO5OQ72G2R82

Classification: 3.1 Additional regulated information required to be disclosed under the laws of a Member State

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