20th Jan 2015 11:36
LONDON (Alliance News) - Rio Tinto PLC continued to ramp up production of iron ore in the fourth quarter of 2014 even though prices continued to slide, while its copper production fell as a mine in Chile was hit by water restrictions and another copper-gold mine was hit by a fire.
The mining giant said iron ore production rose 12% on the year in the fourth quarter of 2014, while shipments rose 13%, even though iron ore prices remained under pressure amid fears about economic growth in China. Output of its other metals and coal fell across the board, with total copper production down 23%.
The fourth quarter figures meant that iron ore production and shipments were up 11% and 17%, respectively for the year as a whole, while copper production was up just 4%.
Total 2014 global iron ore shipments rose to 302.6 million tonnes, while total production hit 295.4 million tonnes, just ahead of the company's guidance for shipments of 300 million tonnes, and in line with production guidance of 295 million tonnes. Rio Tinto's share of the global iron ore production was 12% higher than in 2013, at 233.6 million tonnes, while its share of the global iron ore shipments was 239.9 million tonnes.
The company said mined copper production for the year of 603,100 tonnes was 4% higher than in 2013, driven by the sustained ramp-up at its Oyu Tolgoi mine in Mongolia. This ramp-up, along with higher grades at both Oyu Tolgoi and Kennecott in the US, resulted in a 69% increase in mined gold production over 2013.
"Mined and refined copper production was broadly in line with upgraded guidance of approximately 615,000 tonnes and 300,000 tonnes, respectively. This was achieved notwithstanding lower than expected production from Escondida and the fire experienced at Oyu Tolgoi in the fourth quarter," it said in a statement.
At Escondida, Rio Tinto said a lower-than-expected volume of sulphide ore was delivered to the mill in the fourth quarter due to water restrictions affecting the site.
Global bauxite production fell 6% in the fourth quarter and was down 3% in the year as a whole, as its Gove mine in Australia transitioned to exporting following the curtailment of the refinery in May.
Aluminium production in 2014 was broadly in line with 2013 at 3.4 million tonnes, despite the closure of the Shawinigan site in Canada in November 2013 and the partial shutdown at Kitimat, also in Canada, which continues to prepare for full commissioning of the modernised smelter during the first half of 2015.
"Rio Tinto?s share of bauxite, alumina and aluminium production for 2014 was in line with production guidance of 41 million tonnes, 7.4 million tonnes and 3.4 million tonnes, respectively," the company said.
Coal production was hit by the divestment of the Clermont mine in Australia. Hard coking coal production in Australia in 2014 dropped 8% from 2013 to 7.1 million tonnes as mines focused on producing more thermal coal, whilst semi soft coking coal production dropped 17% from 2013 to 3.2 million tonnes.
Thermal coal production in Australia fell 4% to 21.5 million tonnes. Rio Tinto said thermal coal production, excluding the divested Clermont mine, rose 15% from 2013.
The company said thermal coal production was 6% higher than its guidance for the year of 18 million tonnes, excluding Clermont, whilst hard coking coal was in line with guidance of 7 million tonnes whilst semi-soft production was 7% above guidance, which was set at 3 million tonnes.
Uranium production from Energy Resources of Australia was suspended until June 2014 after the failure of a leach tank in 2013, resulting in production falling 61% compared with 2013 to 1.8 million pounds. Uranium production from Rossing also fell by 36% to 2.3 million pounds of uranium after Rio Tinto adjusted its operations to suit the current market conditions.
Total uranium production did not meet guidance and was 5% below the 4.3 million pound target.
Diamond and mineral production also failed to meet guidance. In 2014, Argyle diamond production fell 19% to 9.2 million carats, Diavik diamond production remained flat at 4.3 million carats and Murowa diamond production increased by 7% to 344,000 carats.
Carats recovered were lower than the 15 million carats guidance given in the third quarter reflecting a maintenance shutdown at Argyle.
Rio Tinto spent USD765 million before tax and divestments in 2014, down from USD948 million in 2013. Of the capital expenditure in 2014, 33% was on copper, 5% on iron ore, 18% on energy such as coal, 15% on diamonds and minerals and 1% on aluminium, with the balance spent on central exploration.
By Joshua Warner; [email protected]; @JoshAlliance
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