Rio Tinto PLC on Friday reported a lift in second-quarter production of iron ore, copper and bauxite, but downgraded full-year guidance for aluminum, alumina and diamonds. Here are some remarks from its quarterly operations report.


On iron-ore production:

"Gudai-Darri delivered first ore from the main plant in June. As it ramps up, we expect increased production volumes and improved product mix in the second half, with Gudai-Darri capacity to be reached in 2023. Pilbara operations produced 78.6 million [metric] tons (100% basis) in the second quarter, 4% higher than the second quarter of 2021. While significantly higher than average rainfall in May impacted mine production, continued focus on mine pit health and commissioning of Gudai-Darri supported a stronger second quarter."


On iron-ore markets:

"Iron ore Platts CFR prices trended downwards to $120/ton at the end of the second quarter, even though the average prices were just below $140/ton year to date. The downward pressure was driven by extended Covid-19 restrictions that impacted China's downstream steel demand to a greater extent than steel production and iron ore consumption."


On aluminum output:

"Aluminum production [of 731,000 tons] was 10% lower than the second quarter of 2021 due to reduced capacity at our Kitimat smelter in British Columbia following the strike which commenced in July 2021. A controlled restart began at the end of the second quarter of 2022, with ramp-up progressing subject to plant stability. Production at Boyne smelter in Queensland was impacted due to process instability following COVID-19 related unplanned absences. Production has been stabilized and the cells that have been taken offline are being ramped up over the next 12 months. All of our other smelters continued to have stable performance."


On aluminum markets:

"Following record high prices in the first quarter, the expected disruption to Russian aluminum production did not materialize. Strong aluminum supply and weaker domestic demand in China shifted it to a net export position for aluminum in the first half of 2022. Alumina shifted to a net export position over the same period due to strong growth in domestic refining. The outlook for demand growth has also been dampened by Covid-19 restrictions in China and the reduced consumer sentiment in developed markets. Nevertheless, reported inventories continue to decline and high power prices are limiting production growth outside China."


On copper output:

"Mined copper production of 126,000 tons was 9% higher than the second quarter of 2021 due to higher material movement and higher grades and recoveries at Kennecott and Escondida, partly offset by lower grades and recoveries at Oyu Tolgoi as a result of planned mine sequencing."


On copper markets:

"After reaching a record quarterly average price in the first quarter, prices started trending down in late April, as a wave of uncertainty surrounding the global economy and China's Covid-zero policy weighed on the prospects for copper demand. Exchange inventories remain at multi-year lows, and mine supply continues to face disruptions, although mine project start-ups in the second half should help alleviate market tightness."


On lithium markets:

"The electric-vehicle market continues to enjoy firm growth, despite rising raw material costs and general supply chain issues in the automotive market. After sharp price increases in the previous quarters, lithium carbonate prices stabilized in the second quarter, as supply starts to keep pace with demand. Mine supply growth is expected to pick up further in the second half as idled mine capacity and new projects come online."


Write to Rhiannon Hoyle at


(END) Dow Jones Newswires

July 14, 2022 20:11 ET (00:11 GMT)

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