Diversified major Rio Tinto reported lower production across nearly all its commodities, besides copper, in the three months to September.
“We have delivered consistent operational performance in the third quarter, highlighted by strong production from the group’s copper assets,” Rio CEO Jean-Sebastian Jacques reported on Tuesday.
“We made strong strategic progress with the full exit from coal, the announcement of the additional $32-billion share buy-backs, and the signing of a binding conditional agreement to exit Grasberg for $3.5-billion.”
Iron-ore production in the third quarter was down 3% on the previous corresponding period, to 82.5-million tonnes, and iron-ore shipments from the Pilbara were down 5% in the same period, to 81.9-million tonnes.
Rio explained that iron-ore shipments were affected by planned maintenance cycles and safety pauses across all operations following the fatality of a truck operator at the Paraburdoo iron-ore mine, in August.
In the year to date, Rio produced 251.2-million tonnes of iron-ore from the Pilbara, up 4% on the previous corresponding period.
Bauxite production for the quarter was down 1% on the third quarter of 2017, to 12.7-million tonnes, with Rio saying that strong production from the Weipa operation was offset by lower production at the non-managed Sangaredi and Porto Trombetas mines, in Guinea and Brazil respectively.
Aluminium production for the quarter was 1% lower than the previous corresponding period, at 88 000 t, primarily owing to ongoing labour disruptions at the non-managed Benacour smelter, in Canada.
Rio has now revised its full year production guidance for aluminium of between 3.4-million and 3.5-million tonnes, down from the previous estimate of between 3.5-million and 3.7-million tonnes.
Meanwhile, mined copper production for the third quarter was up 32% on the previous corresponding period, to 159 700 t, reflecting the increased production from the US-based Kennecott operation, which saw higher grades.
At the end of the September quarter, Rio signed a binding agreement to sell its interest in the Grasberg mine, in Indonesia, to PT Indonesia Asahan Aluminium, for $3.5-billion.
In line with a 1996 participation agreement, Rio Tinto had a right to 40% of production from Grasberg above a pre-agreed level, and 40% of all production after 2022.
The transaction, which is expected to close by the first quarter of 2019, is subject to a number of conditions, including regulatory approvals.
Meanwhile, Rio’s coal production for the third quarter ended September fell significantly, as the company completed the sale of its interests in the Kestrel and Hail Creek mines in August.
The sale of these assets, along with the Valeria coal and Winchester South development projects resulted in gross disposal proceeds of $4.15-billion.
During the quarter, Rio produced 712 00 t of hard coking coal and 397 000 t of thermal coal. For the full year, hard coking coal production is expected to reach four-million tonnes, with 2.5-million tonnes of thermal coal targeted, reflecting the completion of the asset disposal.
“We continue to pursue all opportunities to improve productivity and drive enhanced cash flow generation. This, combined with the disciplined allocation of capital, will ensure we continue to deliver superior returns to our shareholders in the short, medium and long term,” said Jacques.