Rio Tinto hit its 2015 target for iron ore and plans to dig even more this year as it chases revenue in a world with falling commodity prices.
According to production figures released today, Rio Tinto produced 336.6 tonnes of iron ore, up 11%, for the full 12 months, most of it from the Pilbara and roughly in line with guidance of around 340 million tonnes.
Production accelerated in the second half with expanded infrastructure in the Pilbara as well as a number of productivity improvements.
Global iron ore production in 2016 is expected to be 350 million tonnes.
The price of iron ore is running at $42.66 a tonne.
Rio Tinto, like other major iron ore producers, has been cutting costs and increasing production as it chases falling commodity prices. Rio’s latest move is to freeze wages this year.
Rio Tinto has about 60,000 employees, 24,000 of them in Australia.
CEO Sam Walsh said today: “We will continue to focus on disciplined management of costs and capital to maximise cash flow generation throughout 2016.”
Rio posted a better than expected first half underlying earnings of $US2.9 billion. But the result is still 43% less than the $US5.19 billion for the same period a year ago. Analysts had been expecting $US2.4 billion.
Earnings from iron ore were down 49% to $US4.09 billion. This was driven by the impact of lower prices, down 46% on average.