17th Jul 2020 05:57
(Alliance News) - Rio Tinto PLC on Friday left its annual guidance unchanged after posting mixed second-quarter production figures.
Bauxite and iron ore output grew in the three months to June 30, though there was a double-digit fall in titanium dioxide slag production, figures from the miner showed.
The FTSE 100-listed firm did edge its capital expenditure forecasts higher as the bite from Covid-19 eased and the US dollar weakened.
"We delivered a strong performance, particularly in iron ore and bauxite, demonstrating the underlying resilience of our business and ability to adapt in difficult conditions. Our iron ore assets are performing well in a strong pricing environment and we are on track to meet our 2020 iron ore guidance. Despite various Covid-19 related challenges, all our assets have continued to operate, with our first priority to protect the health and safety of all our employees and communities," Chief Executive Officer Jean-Sebastien Jacques said.
Pilbara iron ore production rose 4% year-on-year in the second quarter to 83.2 million tonnes, with shipments edging 1% higher to 86.7 million tonnes.
IOC iron ore pellets & concentrate output climbed 9% to 2.8 million tonnes during the second quarter. Also seeing a 9% annual hike was bauxite production which rose to 14.6 million tonnes.
Dropping annually, however, was second-quarter titanium dioxide slag production, by 13% to 262,000. Rio Tinto noted that this was due to Covid-19 restrictions in South Africa and Quebec.
Mined copper output slipped by 3% to 132,800 tonnes, while aluminium production decreased by 2% to 785,000.
Rio Tinto last week Thursday said it will wind-down and then eventually close its New Zealand aluminium smelters amid a "challenging" time for the industry.
The FTSE 100-listed miner said NZAS had served Meridian Energy with a notice to terminate the power contract which ends in August next year. The news follows a strategic review which Rio said showed "the business is no longer viable given high energy costs and a challenging outlook for the aluminium industry".
Rio Tinto also has aluminium assets in Australia, Canada and Iceland.
"Governments are gradually lifting restrictions on the movement of goods and people as part of their Covid-19 recovery plans. However, some restrictions remain in place or are being reintroduced. As a result, there continues to be an impact on projects in general although to a lesser degree than earlier in the year," Rio Tinto said.
It added that capital expenditure for 2020 will be around USD6 billion, due to a weaker US dollar and a "reduced impact of Covid-19 on both sustaining and development expenditure".
It had previously forecast annual capex between USD5 billion and USD6 billion.
Capex forecasts for 2021 and 2022 have been nudged higher to USD7 billion from USD6.5 billion.
"Production guidance remains unchanged across all commodities," the miner added.
By Eric Cunha; [email protected]
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