Rio Tinto Ltd.’s (ASX: RIO) stock has surged 5.45% in the last five days and moved up about 63.4% in last one year (as on January 16, 2017). The group released its fourth quarter production results on January 17, 2017. As per the 2016 performance, RIO witnessed Pilbara iron ore shipments of 327.6 million tonnes (100 per cent basis) in line with the full year guidance of 325 million to 330 million tonnes range. This has been 3% higher than that of 2015. RIO also reported that aluminium production was 10% higher than 2015, with record annual production at ten smelters. Kitimat smelter was the key contributor and has produced at nameplate capacity since April 2016. Record bauxite production of 47.7 million tonnes also exceeded the full year guidance of 47 million tonnes and there was a rise in third party shipments to 29.3 million tonnes. Even the hard coking coal production was just above the top end of the guidance range, while semi-soft coking and thermal coal production of 21.4 million tonnes has been as per the guidance.
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Production Results (Source: Company Reports)
On the other hand, mined copper production, although 4% higher than 2015 at 523 thousand tonnes, fell short of the earlier provided full year guidance. This was at the back of no metal share delivered from Grasberg and lower than expected production at Kennecott. Titanium dioxide slag production witnessed 4% slip on 2015 in line with the market demand scenario.
Rio Tinto’s Pilbara shipments in 2017 are expected to be between 330 and 340 million tonnes (100 per cent basis), subject to weather conditions. RIO also expects to have production from Silvergrass iron ore project before Christmas in 2017. The group expects 48 to 50 million tonnes of bauxite, 8.0 to 8.2 million tonnes of alumina and 3.5 to 3.7 million tonnes of aluminium to be produced in 2017. Mined copper production is expected to be between 525 and 665 thousand tonnes, with higher production at Escondida, while refined copper production is expected to be between 185 and 225 thousand tonnes.
RIO has a strong portfolio of projects and operates in 14 countries across eight commodities. The group reported for the bulk of the exploration spend in the fourth quarter for copper targets in Australia, Botswana, Chile, Kazakhstan, Namibia, Peru, Serbia, United States and Zambia. RIO had also finalised the sale of its aluminium assets at Lochaber, Scotland for a consideration totalling $410 million, in December 2016.
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