Rio Tinto surprises with copper production numbers

Rio Tinto confirmed that iron ore shipments were at the upper end of its guidance and copper production was ahead, but production for the former will be flat in 2019, with the latter expected to fall.

The FTSE 100 group said the negative impact to profits from raw material input price inflation, particularly in the aluminium business, had continued in the second half of 2018.

According to Rio, $8.6bn of pre-tax disposal proceeds were received during the year, including the sales of the entire interest in the Grasberg mine in Indonesia, the Dunkerque aluminium smelter and the coking coal assets.

The sale of the 68.62% interest in Rossing is expected to complete during the first half of 2019.

For 2018, iron ore shipments rose 2% to $338.2m tonnes, in-line with Rio’s guidance for it to be at the upper end of its 330-340mt range. For 2019, management stated a target for shipments to be 338-350mt.

Mined copper production was up 37% to 633.5 kilo-tonnes, ahead of guidance for it to be at the upper end of 510-610kt. For 2019, management pencilled in 550-600kt.

Diamond production hit 18.4m carats, in-line with the guidance of 17-20mct. For 2019 the guidance was 15-17mct.

In the aluminium division, bauxite production came out at 50.4Mt, in-line with the guidance of 50-51mt and after maintenance shutdowns alumina fell a little short of the 8.0-8.2Mt target. Aluminium came in at 3.46mt, the bottom end of the downwardly revised 3.4-3.5mt target amid the ongoing lockout at the Becancour smelter. Targets for 2019 are 56-59mt of bauxite, 3.2-3.4mt of aluminium and 8.1-8.4mt of alumina.

Titanium slag production was down 15% at 1.12mt, versus guidance of 1.1-1.2mt. Three of nine furnaces at Rio Tinto Fer et Titane are idle, two of which are being rebuilt, with the focus being to maximise productivity of the furnaces currently in operation, with a decision to re-start idle furnaces to be based on maximising value over volume.