Rio Tinto maintains iron ore guidance despite challenging Jan-Mar quarter
http://www.chemnet.com Apr 21,2017 PlattsRio Tinto's iron ore shipments guidance for 2017 remains on track despite a challenging first quarter, the company said in its quarterly production results released Thursday.
The miner's Western Australian Pilbara iron ore operations produced 77.2 million mt -- Rio Tinto's share was 63.6 million mt -- in the quarter, down 3% year on year and 10% from the October-December quarter, it said.
"Production and sales were both impacted by significant weather disruptions, which resulted in heavy flooding across several sites including the rail network, along with the suspension of ship loading on a number of occasions," the miner said.
Despite the disruptions, which included cyclone activity, shipments from Rio Tinto's Pilbara iron ore assets were unchanged year on year at 76.7 million mt on a 100% basis, the company said. They were, however, down 13% from the December quarter.
There has been no change to its shipment guidance for 2017 of 330 million-340 million mt, and all operations across the mine and infrastructure network had now recovered and were operating to plan, it added.
The miner said that 20% of its sales in the quarter were priced with reference to the prior quarter's average index, lagging by one month. The remainder was sold either on current quarter average, current month average or on the spot market.
Approximately 62% of the sales in the January-March quarter were on a CFR basis, and the rest on an FOB basis, it said.
SILVERGRASS PROJECT ON TRACK
Rio Tinto's Silvergrass iron ore project in the Pilbara was on target for first iron ore in the first half of this year, Rio said.
The project will incrementally increase the Nammuldi operation by 10 million mt/year, delivering high grade, low phosphorus ore for the Pilbara Blend, it said.
Silvergrass is a satellite deposit adjacent to Rio's Nammuldi mine and is part of the Great Nammuldi precinct.