Rio Tinto Records 11% Jump in Annual Iron-Ore Shipments
January 18 2016 - 5:18PM
Dow Jones News
By Rhiannon Hoyle
SYDNEY--Rio Tinto PLC (RIO.AU) shipped record volumes of iron
ore again in 2015 as the world's No. 2 exporter of the steelmaking
commodity put the finishing touches on a massive expansion of its
Australian mining operations.
On Tuesday, Rio Tinto reported annual global iron-ore shipments
totaling 336.6 million metric tons, up 11% on-year and just shy of
its earlier projection of 340 million tons.
Volumes were more than a third higher than what the company,
which runs iron-ore operations in Canada as well as Australia, was
shipping just three years earlier. Rio Tinto has been expanding its
presence in the Pilbara iron-ore mining hub of northwest Australia
in a bet that China will need more of the commodity to make steel
for its skyscrapers and for industries such as auto manufacturing,
even as its economy slows.
China buys three in every five tons of iron ore traded by sea,
with Australia its biggest supplier.
However, Rio's record shipments have added to a rising global
oversupply that's dragged prices to roughly US$40 a ton from more
than US$190 a ton as recently as 2011.
Executives say the scale of Rio Tinto's iron-ore business--which
it relies on for the bulk of group earnings--and quality of ore in
its deposits allow the company to produce material profitably and
at a significantly lower cost than competitors.
The miner said an expansion of its business in the Pilbara to an
annualized run-rate around 360 million tons was almost
complete.
It said it is now squeezing out so-called incremental tons from
its Nammuldi operation after expanding its rail and port capacity.
Rio Tinto produced 309.9 million tons from its Australian
operations last year.
The company forecast global group shipments of roughly 350
million tons in 2016.
Rio Tinto recorded mixed output for its other divisions. Mined
copper output fell 16% in 2015 to 504,400 tons, while hard coking
coal production was 11% higher at 7.9 million tons.
-Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
January 18, 2016 17:03 ET (22:03 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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