The share price of Rio Tinto (LSE: RIO) (NYSE: RIO.US) is currently up 2.75%, following publication of the multinational mining corporation’s production data for the first half. The company reported record first-half shipments and production for iron ore, up 23% and 11% respectively.
Back in May, Rio Tinto had announced that the run-rate of its Pilbara ( Western Australia) iron ore system of mines, rail and ports had reached a run rate of 290m tonnes a year (Mt/a), two months ahead of schedule. It’s now reported that first-half shipments from the Pilbara operations exceeded production, as it drew on stocks built up ahead of the delivery of expanded infrastructure, while it continued to expand existing mines in order to utilise increased rail and port capacity.
Rio Tinto has increased its full-year guidance for copper production, following what it describes as “strong production” in the first half, which lead to a 23% like-for-like increase in the half, and which, the company says, “more than offset the impact of divestments in 2013“.
Aluminium production for the first half was in line with the previous year, production of hard-coking coal improved and production of thermal coal increased 6%, setting a new record for the the first half. However, first-half production of titanium dioxide was down, as Rio Tinto continues to match its production volumes to falling demand.
The company says that Gove — the Australian bauxite mine, not the ousted Education Secretary — has been operating as an export business since refinery operations were curtailed in in May and is expected to achieve an export capacity of 8 Mt/a by the end of 2015. Global bauxite production for the first half was lower than in 2013, as production was reduced in line with the curtailment of the refinery.
Commenting on the results, CEO Sam Walsh said
“We achieved another half of very strong operating performance, powered by productivity gains across our business. Our iron ore expansion continues to deliver high-margin growth reinforcing our position as a low cost producer.
“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.“
At 3,334p, Rio Tinto’s share price is still down 2.8% so far in 2014, versus a flat FTSE 100 — but it’s beating the index over five years, with a rise of 71% for the mining giant, compared with the FTSE 100’s 64% gain.
