31st Oct 2019 10:31
(Alliance News) - Mining giant Rio Tinto PLC on Thursday said it is well positioned to continue generating strong returns.
Addressing at an investor seminar on Thursday, Rio Tinto said its strong financial performance, portfolio and capital discipline are demonstrated by its expected USD10 billion free cash flow for 2019.
Rio also said its 2019 total capital expenditure is expected to be USD500 million lower than previous guidance, coming in around USD5.5 billion with USD500 million deferred until 2020.
As a result, the miner's capex guidance for 2020 is now about USD7 billion. Guidance for 2021 remains unchanged, the miner said, at about USD6.5 billion. 2020 capex also is expected at about USD6.5 billion.
Chief Executive Jean-Sebastien Jacques said: "Rio Tinto has a world-class portfolio, delivering superior margins and free cash flows, with an established track record of generating resilient returns. This includes USD32 billion returned to shareholders since 2016, in a volatile macro environment.
"We are not complacent, and will step up our operational performance to fully optimise our assets and maintain strong cash delivery. We will continue to create value by strengthening relationships with our customers and with other partners, both of which are crucial for our future success."
Rio's Pilbara iron ore shipment and cash unit cost guidance for 2019 is unchanged at between 320 to 330 million tonnes and USD14 to USD15 per tonne, respectively. 2020 shipment guidance is expected to be 5% higher than 2019, subject to market conditions - specific guidance will be provided in January, Rio added.
Sustaining capital expenditure for Pilbara, however, is now expected to be between USD1 billion and USD1.5 billion per year from 2020 onwards compared to previous guidance of about USD1 billion.
Pilbara's annualised system capacity of 360 million tonnes per annum is expected to be achieved once the Koodaideri phase 1 project is fully commissioned, with first ore still expected in late 2021.
Rio also updated on its progress at Oyu Tolgoi, saying the construction of shaft 2 is now complete with commissioning in progress. A mine design will be completed in the first half of 2020 with a definitive estimate expected in the second half.
The miner also noted it will disclose new emissions targets in early 2020.
"The new targets will move Rio Tinto closer to its long-term commitment of substantially decarbonising its business by 2050," the miner added.
Shares in Rio Tinto were 1.4% lower in London on Thursday morning at 4,007.50 pence each.
By Paul McGowan; [email protected]
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