(Alliance News) - Rio Tinto PLC on Friday reported a reduction in production and shipment of iron ore amid maintenance at a port, but promised to "generate superior returns to shareholders" going forward.
The Anglo-Australian miner said Pilbara iron ore shipments of 82.1 million tonnes in the three months to the end of September were 5% lower than in the third quarter of 2019. A recovery in planned maintenance activity in the port led to lower shipments, the company explained.
Pilbara is in Western Australia, and Rio uses the Dampier and Cape Lambert ports in the state for shipments.
Pilbara iron ore production of 86.4 million tonnes was 1% lower year-on-year but 4% higher quarter-on-quarter.
Third-quarter bauxite production of 14.5 million tonnes was 5% higher than a year ago, with increased year-on-year production across all sites, Rio Tinto said, including record quarterly production at the non-managed CBG joint venture in Guinea.
Aluminium production of 800,000 tonnes was 1% higher than the prior year, with stable operations across the company's smelter portfolio, Rio Tinto noted.
Elsewhere, mined copper production of 129,600 tonnes was 18% lower than the prior year, and 2% lower than in the second quarter of 2020, due to lower grade at Kennecott mine, located in the US state of Utah, as a result of pit sequencing to accommodate the extended smelter shutdown.
Refined copper was 57% lower, primarily due to delays in restarting the Kennecott smelter.
Titanium dioxide slag production of 293,000 tonnes was 9% lower year-on-year, due to Covid-19 restrictions in Quebec and South Africa and lower market demand, but the output was 12% higher when compared to the previous quarter.
Looking ahead, Rio Tinto kept its guidance for all of 2020 unchanged since its second quarter operations review, with the exception of titanium dioxide slag, which is now expected to be around 1.2 million tonnes from previously estimated 1.2 million to 1.4 million tonnes.
In mid-August, the company updated its refined copper guidance following delays to the restart of the smelter at Kennecott due to unexpected issues following planned maintenance. The start-up of the smelter has commenced, and the company said it expects that it will be fully operational during October. 2020 guidance for refined copper remains at 135,000 tonnes to 175,000 tonnes.
Turning to operations, at the Oyu Tolgoi underground project in Mongolia, a definitive estimate is expected later in 2020. Preliminary indications from the definitive estimate process are that first sustainable production is trending towards the earlier months of the October 2022 to June 2023 range.
The estimated development capital cost remains within the range of USD6.6 billion to USD7.1 billion, Rio Tinto said, and has now been updated to include known impacts of the Covid-19 pandemic.
Rio Tinto Chief Executive Jean-Sebastien Jacques said: "We have delivered a good operational performance across most of our assets catching up on planned maintenance activity, particularly in iron ore, and continuing to adapt to new operating conditions as we learn to live with Covid-19."
"The quality of our assets, coupled with our strong focus on capital discipline and value over volume approach, mean we can continue to invest in our business, support our communities, pay taxes and royalties to host governments and continue to generate superior returns to shareholders in the short, medium and long term," added Jacques.
Rio Tinto shares were trading 1.0% higher in London on Friday at 4,703.00 pence each.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
Copyright 2020 Alliance News Limited. All Rights Reserved.
Rio Tinto (RIO)
