Rio Tinto on Wednesday said it expects 2023 iron-ore shipments to reach the top half of company guidance, but downgraded production expectations for a number of other commodities, including alumina and refined copper. Here are some remarks from the miner's second-quarter report.

 

On Pilbara iron ore mines:

"We produced 81.3 million [metric tons] in the second quarter, 3% higher than the corresponding period of 2022. The ramp-up of Gudai-Darri continued to plan, with the mine reaching nameplate capacity on a sustained basis during the period. Challenges at the Yandicoogina mine associated with materials handling and plant reliability, highlighted in the first quarter, continued into the period.

Shipments of 79.1 million tons were 1% lower than the second quarter of 2022, and 4% lower than the prior quarter. This was primarily due to planned major maintenance at the Dampier Port and a train derailment on 17 June. The rail line was reopened on 21 June.

With ongoing operational improvements across the Pilbara system, and uplift from implementation of the Safe Production System, full year shipments are expected to be in the upper half of the original 320 to 335 million ton range. With higher production anticipated in the second half, SP10 is expected to be a larger proportion of shipments (first half 2023 = 10%)."

 

On alumina operations:

"Alumina production of 1.9 million tons was in line with the second quarter of 2022 as improved operational stability at our Yarwun and Vaudreuil refineries was offset by unplanned plant downtime at Queensland Alumina Limited (QAL). As a result, our full year alumina production has been reduced to 7.4 to 7.7 million tons (previously 7.7 to 8.0 million tons), as QAL implements initiatives to improve plant stability and production rates."

 

On bauxite output:

"Bauxite production of 13.5 million tons was 5% lower than the second quarter of 2022 as our Weipa operations were impacted by the higher-than-average first quarter rainfall, which continued to reduce pit access and led to longer haul distances. Production was further affected by equipment downtime at both Weipa and Gove. As a result, our bauxite full year production is expected to be at the lower end of our 54 to 57 million ton range, as we implement plans to recover lost production at both operations through the remainder of the year."

 

On refined copper production:

"Refined copper production was 56% lower than the second quarter of 2022 as we commenced the largest rebuild of the smelter and refinery in Kennecott's history in May 2023. The [circa] $300 million rebuild has incorporated approximately 300 engineering and maintenance projects and we are on track to complete the full scope of work.

While inspecting the integrity of the flash converting furnace, we identified additional work necessitating a full rebuild, rather than the planned partial rebuild. The full rebuild is expected to further improve asset stability and process safety management, however as a result the consolidated scope of work is now expected to be completed in September 2023 (previously August 2023)."

As a result of the extension, refined copper production guidance has been reduced to 160,000-190 tons, from an earlier estimate of 180,000-210,000 tons, and copper C1 unit cost guidance has been increased to $1.80 to $2.00 a pound from $1.60 to $1.80 a pound previously, the miner said.

 

On Escondida copper mine:

"Mined copper production was 6% lower than the second quarter of 2022 due to 10% lower concentrator throughput rates following unplanned maintenance, and lower crusher and conveyor availability. In addition, there was also a 16% decrease in copper recoverable from ore stacked for leaching due to lower grades and volume of stacked material."

 

On Oyu Tolgoi underground project:

"We continue to see strong performance from the underground mine, with a total of 54 drawbells opened from Panel 0, including 18 drawbells during the quarter. To date we are yet to lose a drawbell or draw point from the underground mine.

Shaft sinking rates improved during the quarter and at the end of June, shafts 3 and 4 reached 627 meters and 740 meters below ground level, respectively. Final depths required for shafts 3 and 4 are 1,148 and 1,149 meters below ground level, respectively. As reported in our presentation materials for the Oyu Tolgoi site tour, we now expect both shafts to be commissioned in the second half of 2024 (previously first half of 2024) with shaft sinking rates now meeting those required for completion."

 

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

 

(END) Dow Jones Newswires

July 18, 2023 21:03 ET (01:03 GMT)

Copyright (c) 2023 Dow Jones & Company, Inc.
Rio Tinto (ASX:RIO)
Historical Stock Chart
From Jan 2024 to Feb 2024 Click Here for more Rio Tinto Charts.
Rio Tinto (ASX:RIO)
Historical Stock Chart
From Feb 2023 to Feb 2024 Click Here for more Rio Tinto Charts.