Rio Tinto reports strong first quarter production

Rio Tinto produced some positive production growth in the first quarter of 2016, it reported on Tuesday, with its iron ore and aluminium operations particular standouts.

The FTSE 100 firm reported global iron ore shipments of 80.8 million tonnes, of which Rio Tinto’s share was 64.9 million tonnes, which was 11% higher than in the first quarter of 2015.

Rio put this down to the completion of a number of brownfield developments and expanded infrastructure capacity in the Pilbara in 2015, though the volumes were lower quarter-on-quarter due to normal seasonal factors.

There were also improvements throughout the aluminium product group, including bauxite production of 11.1 million tonnes being a 6% improvement compared with 2015. Alumina production improved by 7% in the same period.

Aluminium production itself increased by 10% over the first quarter of 2015, with the company pinning that on the successful completion of ramp-up at the Kitimat smelter in British Columbia, Canada.

Rio Tinto’s mined copper production was 27% higher than the previous quarter, with higher grades at Kennecott, improved throughput and water availability at Escondida and a share of production from Grasberg. Copper was down 2% year-on-year.

Hard coking coal was down 1% on-year but up 4% on-quarter, while semi-soft and thermal coal slipped 3% on-year and 8% on-quarter. Titanium dioxide slag production was down 24% on-year, but up 10% on-quarter.

During the quarter, the group completed its divestment of the Bengalla coal mine and the restructure of the Coal & Allied group, and announced the sale of the Mount Pleasant coal project.

"These results demonstrate our commitment to operational excellence in 2016, with notable improvements in several important areas, including a strong performance in aluminium,” said Rio Tinto chief executive Sam Walsh.

“However, we continue to experience volatility in commodity prices across all markets. In the face of a testing external environment, our focus remains on delivering further cost and productivity improvements, disciplined capital management and maximising free cash flow, to ensure that Rio Tinto remains strong,” he added.