Rio Tinto Releases Third Quarter Production Results

Rio Tinto chief executive J-S Jacques said “The business performed very well in the September quarter, with a strong quarterly production performance and a wave of productivity improvements embedded through our operations. In particular, we are making good progress with further improvements to our worldclass Pilbara iron ore business, including the opening of the Silvergrass mine and the implementation of AutoHaul™. We continue to shape our asset portfolio and announced $2.5 billion of additional returns to shareholders from the proceeds of the Coal & Allied sale, demonstrating the robustness of our strategy and ability to invest in high-value growth whilst returning excess cash to shareholders. We have announced over $8 billion of cash returns in 2017. Our relentless focus on cash generation and disciplined capital allocation will continue to deliver superior returns for our shareholders.”

Key points

  • Pilbara iron ore shipments were 85.8 million tonnes in the third quarter (100 per cent basis), assisted by improved rail capacity and performance. This was six per cent higher than the third quarter of 2016, which was impacted by shiploader maintenance.
  • Quarterly bauxite production was 12.9 million tonnes for a second consecutive quarter, four per cent higher than the third quarter of 2016, driven by strong performances at Gove and Weipa. Third party shipments for the third quarter were 8.2 million tonnes. Bauxite production guidance is revised to between 50 and 51 million tonnes (previously 48 to 50 million tonnes).
  • Mined copper production was three per cent lower than the corresponding quarter of 2016 due to lower copper head grades at Rio Tinto Kennecott and Oyu Tolgoi.
  • Mined copper guidance is revised to between 460 and 480 thousand tonnes (previously 500 to 550 thousand tonnes) following the third quarter impact of the delayed ramp-up of the Escondida expansion, and fourth quarter mine sequencing changes at Rio Tinto Kennecott.
  • Titanium dioxide slag production increased by 23 per cent compared to the third quarter of 2016, reflecting higher market demand.
  • As announced on 1 September 2017, Rio Tinto completed the sale of Coal & Allied to Yancoal Australia for total consideration of $2.69 billion.
  • On 21 September 2017, Rio Tinto announced a new $2.5 billion share buy-back, comprised of a A$700 million (approximately $560 million) off-market buy-back tender in Rio Tinto Limited shares, and an additional $1.9 billion of on-market purchases of Rio Tinto plc shares.
  • In early October, a serious incident at the Rio Tinto Kennecott smelter resulted in a fatality. Investigations are currently underway.

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