Mining giant Rio Tinto expects to produce more iron ore this year, after putting in a solid production performance in 2018 meeting expected output guidance.
The global miner shipped 338.2 million tonnes of iron ore from its Pilbara operations in 2018, in line with full-year guidance.
Both the production and shipment of iron ore in the year to December 31 was up two per cent on the previous year, Rio said in a trading update on Friday.
The miner shipped 87.4 million tonnes of iron ore in its fourth quarter – down three per cent from the preceding quarter – while production in the three months to December 31 was down one per cent at 86.6 million tonnes.
Rio expects to ship between 338 million and 350 million tonnes in 2019 from its main mining hub in Western Australia.
RBC Capital Markets’ mining analyst Paul Hissey says it was a solid year for Rio, but it concerned about the company’s reliance on iron ore production.
“Whilst iron ore prices have held up well recently, we retain our caution around these in the near term and this predicates our underperform rating (and subsequent preference for BHP over Rio),” he said.
“Rio continued to streamline the portfolio through 2018, notably divesting Grasberg and its coal assets, and this has facilitated a focus on capital returns to shareholders.”
Chief executive Jean-Sebastien Jacques says the company delivered a solid performance in the final quarter of 2018, particularly in its copper assets.
“During the year, we further strengthened our asset portfolio, continuing to invest in high quality growth. 2018 saw the early completion of Amrun, the deployment of AutoHaul, the Koodaideri and Robe River investments,” he said.
Just before the end of the year, Rio Tinto announced it had successfully deployed AutoHaul, the world’s first automated heavy-haul, long distance rail network.
Since completing the first autonomous haulage run in July 2018, Rio Tinto has steadily increased the number of autonomous journeys in a controlled and safe manner, with over 1.6 million kilometres now travelled autonomously.
Rio’s 2018 mined copper production of 634,000 tonnes was 33 per cent higher than the previous year and above the guidance, reflecting strong performance at Escondida and increased production from Rio Tinto Kennecott.
It has forecast 2019’s copper production will be between 510,000 and 610,000 tonnes, while refined copper production is expected to be in the 225,000 to 265,000 tonne range.
Meanwhile, bauxite production was down one per cent on 2017, and aluminium production was down three per cent, mostly because of ongoing labour disruptions at the Becancour smelter in Canada.
The miner expects bauxite production of between 56 and 59 million tonnes in 2019, and between 3.2 and 3.4 million tonnes in for Aluminium production.