The production phrase of Australia’s mining boom is cutting in with Rio Tinto announcing a record year in 2013 for production of iron ore, bauxite and thermal coal.
In its December quarter production report, Rio says global iron ore production for the full year of 266 million tonnes (Rio Tinto share 209 million tonnes) set a new annual record, five per cent higher than in 2012.
Fourth quarter global production of 70 million tonnes (Rio Tinto share 56 million tonnes) was six per cent higher than the same period in 2012.
Chief executive Sam Walsh said:
“We have set new records for iron ore production and shipments as we ramp up our 290 expansion, as well as achieving an impressive recovery in copper volumes and record annual production for both bauxite and thermal coal. We have exceeded our cost cutting targets for the year and announced or completed $3.5 billion of non-core asset sales. These actions, together with lower capital expenditure in 2013 and beyond, will ensure that Rio Tinto is well positioned to deliver greater value to shareholders.”
Highlights from Rio Tinto’s fourth quarter production report:
- Record quarterly and annual iron ore production, shipments and rail volumes. Shipments from the Pilbara exceeded production by two million tonnes in the fourth quarter, despite impacts from cyclone Christine, which closed the ports for three days at the end of the year and affected the progressive recovery of rail and ports into January. The safe and efficient ramp up to 290 Mt/a capacity across mines, rail and ports remains on track for completion by the end of the first half of 2014.
- Mined copper benefited from the ramp up of production at Oyu Tolgoi to full capacity and continued improvement in grades and throughput at Kennecott Utah Copper. The heavy equipment access road at Kennecott was completed in October giving renewed access to the entire open pit earlier than originally scheduled.
- Record annual production and shipments for bauxite, with production records at both Australian mines and in Guinea.
- Production of semi-soft and thermal coal improved significantly for the full year due to productivity improvement initiatives and the completion of brownfield mine developments.
- Over $2 billion of operating cash cost improvements achieved in 2013 compared with 2012.
- Exploration and evaluation expenditure reduced by over $1 billion in 2013 compared with 2012, exceeding the $750 million target set for the year.
- Non-core asset divestments of $3.5 billion announced in 2013, of which $2.5 billion completed in 2013.
- Turquoise Hill Resources announced the successful completion of its approximately $2.4 billion rights offering which was fully subscribed.
- The proceeds of the rights issue will be used to repay loans outstanding to Rio Tinto, and will result in a $1.2 billion reduction in Rio Tinto’s consolidated net debt.