Rio iron ore shipments miss estimates

THE Pilbara wet season has impacted Rio Tinto’s first quarter iron ore shipments, though the company remains on track to ship 350 million tonnes this year.
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Rio Tinto at Cape Lambert port, Pilbara WA.

Kristie Batten

Global iron ore shipments on a 100% basis for the March quarter were 72.5 million tonnes, well down on consensus of 82.7Mt, while production was 74.7Mt.

UBS tipped the company to miss consensus, but even the 71.1Mt shipped from the Pilbara was down on the bank’s estimate of 72.3Mt.

The global shipping figure was down 12% on the December quarter, while Pilbara sales were 8% lower.

Wet weather impacted output, while Tropical Cyclone Olwyn and a train derailment affected shipping.

Infrastructure for the expansion to 360Mt per annum remains on track for completion by the end of June and Rio maintained global iron ore shipment guidance of 350Mt for 2015.

The company said it would drawdown on inventories through the year to maximise cashflow.

Mined copper production for the quarter rose by 12% to 144,100 tonnes due to higher throughput at Kennecott and Escondida.

Rio CEO Sam Walsh described the quarter’s performance as “solid”.

“By making best use of our high-quality assets, low cost base and operating and commercial capability, our aim is to protect our margins in the face of declining prices and maximise returns for shareholders throughout the cycle,” he said.

Bauxite production, while 3% below the December quarter, hit a March quarter record of 10.4Mt, 4% higher than the same period of last year.

Aluminium output of 809,000t was flat.

Production of hard coking coal jumped 22% to 2Mt due to improvements at Kestrel South, while semi-soft production jumped 23% to 898,000t due to sequencing at Mount Thorley.

Thermal coal production of 4.7Mt was flat.

Argyle diamond production surged 77% over the December quarter to 3.2 million carats due to improved performance following a maintenance shutdown.

The Rossing uranium mine in Namibia produced 272,000 pounds, down 56% due to expected lower grades and a plant fire.

Pre-tax and pre-divestment exploration and evaluation expenditure for the first quarter was $US126 million ($A163.2 million), compared to $155 million for the same period of 2014.

The bulk, or 39%, was incurred by the copper and coal group, with copper exploration in the US, Chile, Peru, Zambia and Kazakhstan. 

A further 21% was incurred by the diamonds and minerals group, and 6% in iron ore, with the balance by the exploration team.

The company conducted nickel and uranium exploration in the US, bauxite field mapping and drilling in Brazil and Laos, coal work in Australia, and diamond exploration in India and Canada.

Shares in Rio closed at $A54.66 yesterday.