21st Apr 2015 09:43
LONDON (Alliance News) - Anglo-Australian mining giant Rio Tinto PLC Tuesday said iron ore production and shipments increased in the first quarter of 2015 year-on-year but fell from the preceding quarter, yet the company reiterated its full-year production targets across all of its segments.
The world's second-largest iron-ore producer said global iron ore production for the first quarter increased 12% on a 100% basis from last year to 74.7 million tonnes, reflecting the expansion of its mining operations in the Pilbara region with Rio Tinto's share rising 14% to 59.4 million tonnes.
But the company's iron-ore production declined 6% from the preceding quarter. Iron ore sales account for roughly 90% of the FTSE 100 company's profit, which has been hit by the fall in iron ore prices, which have slumped from about USD130 per tonne at the start of 2014 to about USD50 per tonne recently.
"By making best use of our high quality assets, low cost base and operating and commercial capability our aim is to protect our margins in the face of declining prices and maximise returns for shareholders throughout the cycle," said Chief Executive Sam Walsh.
At Pilbara, iron ore production grew 12% from last year to 71.1 million tons, while sales of 69.3 million tonnes was up 8%. The mines in the Pilbara region are among the lowest cost operations in the world, and the current expansion at the mine is due to be completed before the end of the first-half of 2015, it said.
The company's global iron ore shipments for the quarter grew 9% on a 100% basis from a year ago to 72.5 million tons. However, iron-ore shipments declined 12% from the preceding fourth quarter.
In the first quarter, total mined copper production decreased 9% from last year to 144.1 million tonnes, primarily due to lower grades at Kennecott. Bauxite production for the quarter rose 4%, while aluminium production was flat with last year.
Aluminium production in the first quarter was in line with the same period of 2014, despite the partial shut-down at Kitimat, which continues to prepare for first hot metal at the modernised smelter by mid-2015, said the miner.
In the quarter, hard coking coal production increased 10% from a year earlier, and increased by 22% from the preceding quarter, while semi-soft and thermal coal production rose 4% from last year and 4% from the fourth quarter of 2014.
Coal production increased primarily due to improved production rates at Kestrel South following the longwall ramp-up, increased semi-soft production at Mount Thorley and Warkworth and higher thermal production at Hail Creek.
Looking ahead to fiscal 2015, Rio Tinto reiterated its outlook for global shipments approaching 350 million tonnes from its operations in Australia and Canada and its aim to produce 43.0 million tonnes of bauxite, 8.0 million tonnes of Alumina and 3.3 million tonnes of aluminium. It's guidance for coal and copper production also remains unchanged.
In terms of exploration and evaluation, Rio Tinto spent a total of USD126 million in the first quarter, down from USD155 million a year earlier. Of the total expenditure, around 39% was attributable to coal and copper, 6% to iron ore, 21% to diamonds and minerals and the balance by central exploration.
Rio Tinto shares were down 2.4% to 2,805.00 pence per share on Tuesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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