|
Rio
Tinto chief executive J-S Jacques said “We finished the year with good
momentum, particularly in our Pilbara iron ore operations and in bauxite,
despite having experienced some operational challenges in 2019. We are
increasing our investment, with $2.25 billion of high-return projects in
iron ore and copper approved in the fourth quarter. We also boosted our
exploration and evaluation expenditure to $624 million in 2019, further
strengthening our pipeline of opportunities.
Pilbara
Iron Ore
Pilbara
operations produced 326.7 million tonnes (Rio Tinto share 270.7 million
tonnes) in 2019, 3% lower than 2018. Fourth quarter production of 83.6
million tonnes (Rio Tinto share 68.8 million tonnes) was 3% lower than the
same quarter of 2018 and 4% lower than the previous
quarter due to normal maintenance cycles and mine sequencing.
Overall material moved in 2019 was the highest on record. Our increased
focus on waste material movement and pit development will continue in 2020
to improve mine performance and pit sequencing.
2019
shipments of 327.4 million tonnes (Rio Tinto share 272.5 million tonnes)
were 3% lower than 2018. In the first half of 2019, shipments were
impacted by significant weather disruptions, a fire at the Cape Lambert A
port facility and operational challenges. Fourth quarter shipments of 86.8
million tonnes (Rio Tinto share 71.3 million tonnes) were 1% below the
same quarter of 2018.
Performance
in the second half of 2019 was strong, with both production and shipments
exceeding the same period in 2018 despite the extended rail maintenance
shut limiting rail capacity for 12 days. In October 2019 we commenced
trials of portside trading. The operation maintains some inventory at
Chinese ports and can also handle material from third parties and from
IOC. Reported Pilbara sales in the table above therefore reflect the
timing differences that may occur between shipments from the Pilbara and
sales to external customers.
We
price the majority of our iron ore sales (76%) by reference to the average
index price for the month of shipment. In 2019, we priced approximately
16% of sales by reference to the prior quarter’s average index lagged by
one month, with the remainder sold either on current quarter average,
current month average or on the spot market.
In
2019, approximately 22% of sales were made on a cost and freight (CFR)
basis, 46% were made on a cost, freight and insurance (CIF) basis and 32%
were made on a free on board (FOB) basis.
In
2019, we achieved an average iron ore price of $79.0 per wet metric tonne
on an FOB basis (equivalent to $85.9 per dry metric tonne, based on an
average moisture rate of 8%). In 2018, average pricing was $57.8 per wet
metric tonne (equivalent to $62.8 per dry metric tonne).
Pilbara Projects
The
Koodaideri iron ore mine is continuing to progress, with key construction
activities on schedule. We commenced work on the major structural
foundations in the fourth quarter and expect first ore in late 2021,
consistent with previous guidance.
First
ore from the Robe River Joint Venture sustaining production projects (West
Angelas C&D and Mesa B, C and H at Robe Valley) is expected in 2021,
consistent with previous guidance. All
major environmental approvals have been received with the exception of the
Mesa H approval. Procurement and construction activities are progressing,
with concrete pouring commencing at West Angelas and Robe Valley civil
contractors mobilising to site.
On
27 November 2019, we announced the approval of a $749 million (A$1
billion) investment in the Greater Tom Price operations to help sustain
production capacity. This investment in the Western Turner Syncline Phase
2 mine will facilitate mining of existing and new deposits and includes
construction of a new crusher as well as a 13-kilometre conveyor. Pending
final government approvals, construction will start in the first quarter
of 2020 with first ore from the crusher expected in 2021.
T1: Summary in Q4
2019
|
Unit in Million
Tons
|
Q4 2019
|
vs Q4 2018
|
vs Q3 2019
|
2019
|
vs 2018
|
|
Pilbara iron ore
shipments (100% basis)
|
86.8
|
-1%
|
1%
|
327.4
|
-3%
|
|
Pilbara iron ore
production (100% basis)
|
83.6
|
-3%
|
-4%
|
326.7
|
-3%
|
T2: Rio Tinto Share
of Production
|
Unit in Million
Tons
|
Q4
2019
|
vs
Q4 2018
|
vs
Q3 2019
|
2019
|
vs
2018
|
|
|
|
|
Pilbara Blend and
SP10 Lump
|
19.9
|
-8%
|
-5%
|
80.8
|
-5%
|
|
|
Pilbara Blend and
SP10 Fines
|
30.3
|
-4%
|
-4%
|
119.3
|
-3%
|
|
|
Robe Valley Lump
|
1.6
|
12%
|
-5%
|
5.1
|
-14%
|
|
|
Robe
Valley Fines
|
2.8
|
7%
|
-9%
|
9.2
|
-16%
|
|
|
Yandicoogina
Fines (HIY)
|
14.2
|
-4%
|
-3%
|
56.3
|
-2%
|
|
|
Total
Pilbara production
|
68.8
|
-5%
|
-5%
|
270.7
|
-4%
|
|
|
Total
Pilbara production (100% basis)
|
83.6
|
-3%
|
-4%
|
326.7
|
-3%
|
|
T5: Rio Tinto
Operational Data
|
|
Rio Tinto
|
Q4
|
Q1
|
Q2
|
Q3
|
Q4
|
Full Year
|
Full Year
|
|
interest
|
2018
|
2019
|
2019
|
2019
|
2019
|
2018
|
2019
|
|
Rio Tinto Iron Ore
|
|
|
|
|
|
|
|
|
|
Western Australia
|
|
|
|
|
|
|
|
|
|
Pilbara Operations
|
|
|
|
|
|
|
|
|
|
Saleable iron ore
production ('000 tonnes)
|
|
|
|
|
|
|
|
|
Hamersley mines
|
(a)
|
56,364
|
51,218
|
50,087
|
55,567
|
52,521
|
220,612
|
209,392
|
|
Hamersley - Channar
|
60.00%
|
2,228
|
1,552
|
2,419
|
1,579
|
2,420
|
7,173
|
7,970
|
|
Hope Downs
|
50.00%
|
11,691
|
11,913
|
12,101
|
12,155
|
12,095
|
45,368
|
48,264
|
|
Robe River -
Pannawonica (Mesas J and A)
|
53.00%
|
7,555
|
3,529
|
6,282
|
8,914
|
8,225
|
31,947
|
26,951
|
|
Robe River - West
Angelas
|
53.00%
|
8,738
|
7,783
|
8,853
|
9,133
|
8,318
|
32,672
|
34,086
|
|
Total production
('000 tonnes)
|
|
86,576
|
75,995
|
79,741
|
87,347
|
83,579
|
337,772
|
326,663
|
|
Breakdown of total
production:
|
|
|
|
|
|
|
|
|
|
Pilbara Blend and
SP10 Lump (b)
|
|
26,084
|
24,068
|
24,291
|
25,434
|
24,326
|
101,629
|
98,119
|
|
Pilbara Blend and
SP10 Fines (b)
|
|
38,085
|
34,924
|
35,194
|
38,296
|
36,833
|
146,705
|
145,247
|
|
Robe Valley Lump
|
|
2,659
|
1,198
|
2,266
|
3,113
|
2,969
|
11,126
|
9,547
|
|
Robe Valley Fines
|
|
4,896
|
2,331
|
4,015
|
5,802
|
5,256
|
20,821
|
17,404
|
|
Yandicoogina Fines
(HIY)
|
|
14,852
|
13,473
|
13,975
|
14,704
|
14,194
|
57,491
|
56,346
|
|
Breakdown of total
shipments:
|
|
|
|
|
|
|
|
|
|
Pilbara Blend Lump
(c)
|
|
22,161
|
18,968
|
21,653
|
19,329
|
19,680
|
88,215
|
79,630
|
|
Pilbara Blend Fines
(c)
|
|
40,633
|
33,016
|
39,358
|
36,947
|
39,186
|
157,191
|
148,508
|
|
Robe Valley Lump
|
|
2,301
|
863
|
1,957
|
2,433
|
2,350
|
9,209
|
7,603
|
|
Robe Valley Fines
|
|
5,652
|
2,468
|
4,862
|
6,318
|
6,149
|
22,801
|
19,797
|
|
Yandicoogina Fines
(HIY)
|
|
14,831
|
12,294
|
15,212
|
14,286
|
15,260
|
57,380
|
57,052
|
|
SP10 Lump (b)
|
|
0
|
0
|
635
|
2,685
|
2,072
|
0
|
5,391
|
|
SP10 Fines (b)
|
|
1,863
|
1,542
|
1,747
|
4,057
|
2,081
|
3,364
|
9,427
|
|
Total shipments
('000 tonnes) (d)
|
|
87,442
|
69,150
|
85,423
|
86,055
|
86,779
|
338,160
|
327,408
|
|
Breakdown of total
sales:
|
|
|
|
|
|
|
|
|
|
Pilbara Blend Lump
(c)
|
|
22,161
|
18,968
|
21,653
|
19,329
|
19,680
|
88,215
|
79,630
|
|
Pilbara Blend Fines
(c)
|
|
40,633
|
33,016
|
39,358
|
36,947
|
39,186
|
157,191
|
148,508
|
|
Robe Valley Lump
|
|
2,301
|
863
|
1,957
|
2,433
|
2,350
|
9,209
|
7,603
|
|
Robe Valley Fines
|
|
5,652
|
2,468
|
4,862
|
6,318
|
6,149
|
22,801
|
19,797
|
|
Yandicoogina Fines
(HIY)
|
|
14,831
|
12,294
|
15,212
|
14,286
|
15,260
|
57,380
|
57,052
|
|
SP10 Lump (b)
|
|
0
|
0
|
635
|
2,611
|
1,733
|
0
|
4,979
|
|
SP10 Fines (b)
|
|
1,863
|
1,542
|
1,747
|
3,962
|
1,185
|
3,364
|
8,437
|
|
Total sales ('000
tonnes)
|
|
87,442
|
69,150
|
85,423
|
85,888
|
85,545
|
338,160
|
326,006
|
|
(a) Includes 100%
of production from Paraburdoo, Mt Tom Price, Marandoo, Yandicoogina,
Brockman, Nammuldi, Silvergrass and the Eastern Range mines. Whilst
Rio Tinto owns 54% of the Eastern Range mine, under the terms of the
joint venture agreement, Hamersley Iron manages the operation and is
obliged to purchase all mine production from the joint venture and
therefore all of the production is included in Rio Tinto's share of
production.
|
|
(b) SP10 includes
some lower grade products. SP10 fines sales also include IOC product
that is further blended and sold at port in China.
|
|
(c) Restatement due
to separately reporting SP10 lump and SP10 fines products that
include other lower grade products.
|
|
(d) Shipments
represent iron ore exported from Western Australian ports: a portion
of this material is shipped for portside trading to be further
blended and subsequently sold.
|
|
Rio Tinto
percentage interest shown above is at 31 December 2019. The data
represent full production and sales on a 100% basis unless otherwise
stated.
|
|
Iron Ore Company of
Canada
|
58.70%
|
|
|
|
|
|
|
|
|
Newfoundland &
Labrador and Quebec in Canada
|
|
|
|
|
|
|
|
|
Saleable iron ore
production:
|
|
|
|
|
|
|
|
|
|
Concentrates ('000
tonnes)
|
|
2,441
|
1,516
|
2,031
|
2,384
|
1,951
|
6,700
|
7,883
|
|
Pellets ('000
tonnes)
|
|
2,389
|
2,709
|
2,280
|
2,657
|
2,415
|
8,545
|
10,061
|
|
IOC Total
production ('000 tonnes)
|
|
4,830
|
4,225
|
4,311
|
5,041
|
4,366
|
15,245
|
17,943
|
|
Shipments:
|
|
|
|
|
|
|
|
|
|
Concentrates ('000
tonnes)
|
|
2,653
|
878
|
2,239
|
2,427
|
2,083
|
6,619
|
7,628
|
|
Pellets ('000
tonnes)
|
|
2,581
|
2,684
|
2,424
|
2,093
|
2,406
|
8,430
|
9,607
|
|
IOC Total Shipments
('000 tonnes)
|
|
5,234
|
3,562
|
4,663
|
4,520
|
4,490
|
15,049
|
17,235
|
|
IOC Total Sales
('000 tonnes)
|
|
5,234
|
3,562
|
4,663
|
4,520
|
4,490
|
15,049
|
17,235
|
|
Global Iron Ore
Totals
|
|
|
|
|
|
|
|
|
|
Iron Ore Production
('000 tonnes)
|
|
91,406
|
80,219
|
84,052
|
92,389
|
87,945
|
353,017
|
344,606
|
|
Iron Ore Shipments
('000 tonnes)
|
|
92,676
|
72,712
|
90,085
|
90,576
|
91,269
|
353,209
|
344,642
|
Official
Document
|
