Rio Tinto lifts Q2 production

Mining giant retains FY iron ore guidance, lifts copper guidance on strong second quarter.

Rio Tinto has posted strong gains in its second-quarter global iron ore shipments and production, with the mining giant saying its iron ore expansion is continuing to deliver high-margin growth that reinforces its position as a low-cost producer.

The mining giant's global iron ore production in the second quarter was 11% higher compared to the previous corresponding period at 73.1 million tonnes, which pushed first-half global iron ore production to 139.5 million tonnes.

Global iron ore shipments in the second quarter came to 75.7 million tonnes, a 23% increase on the corresponding prior period. This brought first-half global iron ore shipments to 142.4 million tonnes, a 20% increase on the first-half of 2013.

Rio's attributable iron ore production for the second quarter came to 57.5 million tonnes, largely in line with expectations of 57.7 million tonnes.

The miner said it still expects full-year iron ore shipments of approximately 300 million tonnes and global production guidance is unchanged at 295 million tonnes. 

But Rio did lift its full-year copper guidance, saying it now expects its share of mined copper production to total around 585,000 tonnes, compared to previous guidance of 570,000 tonnes. Refined copper production is seen at 300,000 tonnes, up from 260,000 tonnes. The upward revisions are driven by  by higher grades and recoveries at its Kennecott Utah Copper mine in the US and the ramp-up at Oyu Tolgoi in Mongolia.

This upward revision comes after Rio Tinto mined 164.8 kilotonnes of copper in the second quarter, a 28% increase on the second quarter of 2013.

Coal production was mixed.

Hard coking coal production increased for the quarter by six% to two million tonnes while semi-soft and thermal fell seven% to 6.7 million tonnes.

Both were higher for the half.

First-half and quarterly aluminium production was in line with last year, with productivity gains across the smelter portfolio offsetting the loss of production from the closure of Shawinigan in Canada last November.

Rio spent less on exploration and evaluation, which declined from $542 million in the first half of 2013 to $340 million this year.

It did not provide any comments in its quarterly production report about the iron ore market and how far the prices it gets for its products had fallen following a drop of about 30% in the commodity's spot price this year.

Iron ore has represented about 90% of the company's earnings for the last three years.

Rio Tinto chief executive Sam Walsh said the company had achieved another half of very strong operating performance, powered by productivity gains across the business.

"With a relentless focus on achieving sustainable cost savings while delivering the highest quality growth, we continue to transform Rio Tinto into a stronger, more disciplined business that will consistently deliver strong cash flows and shareholder value," he said.

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