Commodity Comment: Rio Tinto Forecasts Lower Copper Production and Iron-Ore Shipments
July 16 2019 - 8:18AM
Dow Jones News
By Joe Wallace
Rio Tinto PLC (RIO) Chief Executive Jean-Sebastien Jacques said
the mining company had experienced a challenging quarter as it
released second-quarter production figures on Tuesday. Here are
some of highlights from the report.
---
Copper
Rio Tinto's output of mined copper fell 13% from a year earlier
to 137,000 tons, reflecting worsening ore quality at Escondida in
Chile and Kennecott in Utah. For 2019 as a whole, Rio Tinto expects
to produce between 550,000 and 600,000 tons, down from 633,500 tons
in 2018.
Work on an underground mine at the Oyu Tolgoi operation in
Mongolia could take to 30 months longer than previously planned,
Rio said in a separate statement. The first sustainable production
could take place between May 2022 and June 2023, likely
exacerbating a global shortage of copper.
---
Iron Ore
Iron-ore production continued to be affected by cyclone damage
to operations in Australia. Production at Rio's Pilbara operations
fell 7% from a year earlier to 79.7 million tons in the second
quarter, and shipments fell 3% to 85.4 million tons. Rio has cut
its forecast for shipments this year to between 320 million-330
million tons, which would represent a small decline from the 338.2
million tons shipped in 2018. This guidance could change again
depending on the weather, it said.
---
Aluminum
Bauxite production was 1% higher than in the second quarter of
2018 at 13.4 million tons as the Amrun mine in Queensland ramped up
production. Aluminum production was almost unchanged at 800,000
tons, weighed down by a dispute between management and unions at
the Becancour smelter that has now been resolved. Rio expects
production to restart at the end of July and for the smelter to be
running at full capacity by mid-2020.
Write to Joe Wallace at joe.wallace@wsj.com
(END) Dow Jones Newswires
July 16, 2019 08:03 ET (12:03 GMT)
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