17 October 2023
Rio Tinto Chief Executive Jakob Stausholm said: “We delivered another quarter of progress and maintained momentum at our Pilbara iron ore operations. We continued to make good headway ramping up our Oyu Tolgoi high-grade underground copper mine, our Kitimat aluminium smelter returned to full production, and we safely restarted the smelter and refinery at Kennecott after completing the largest rebuild in its history. We have more to do as we work towards sustainable performance improvements across our business.
“We took real steps to build our portfolio of materials needed for the future, signing agreements that will see us take a leading position in recycled aluminium in North America and agreeing to enter a joint venture with Codelco to explore for copper in Chile. We also completed further infrastructure agreements with our partners for the world class Simandou iron ore project.
“We are making strong progress towards building the Rio Tinto of the future, striking a balance between disciplined performance in evolving market conditions, investing to generate valuable long-term growth and delivering attractive shareholder returns.”
| Production* | Q32023 | vs Q3 2022 | vs Q2 2023 | 9 MTHS2023 | vs 9 MTHS 2022 | |
| Pilbara iron ore shipments (100% basis) | Mt | 83.9 | +1 % | +6 % | 245.5 | +5 % |
| Pilbara iron ore production (100% basis) | Mt | 83.5 | -1 % | +3 % | 244.0 | +4 % |
| Bauxite | Mt | 13.9 | +2 % | +3 % | 39.5 | -5 % |
| Aluminium | kt | 828 | +9 % | +2 % | 2,427 | +9 % |
| Mined copper (consolidated basis) | kt | 169 | +5 % | +17 % | 460 | +1 % |
| Titanium dioxide slag | kt | 247 | -20 % | -19 % | 835 | -5 % |
| IOC** iron ore pellets and concentrate | Mt | 2.4 | -14 % | +16 % | 7.0 | -10 % |
*Rio Tinto share unless otherwise stated
**Iron Ore Company of Canada
Q3 2023 operational highlights and other key announcements
• Our all-injury frequency rate of 0.36 improved from the third quarter of 2022 (0.39), and was in line with the prior quarter (0.36). We continue to learn from process safety reviews completed in the third quarter following previously reported incidents at our Rio Tinto Iron and Titanium (RTIT) Sorel-Tracy complex and Kennecott, and are planning to further enhance safety at these operations.
• Pilbara operations produced 83.5 million tonnes (100% basis) in the third quarter, 1% lower than the corresponding period of 2022. Shipments were 83.9 million tonnes (100% basis), 1% higher than the corresponding period of 2022. We continue to expect full year shipments in the upper half of the original 320 to 335 million tonne range.
• In early October, we hosted a site tour of our Pilbara operations for investors and analysts. Presentation materials for this visit are available on our website.
• Bauxite production of 13.9 million tonnes was 2% higher than the third quarter of 2022 as we achieved the initial benefits of stabilising our operations, particularly at Weipa where equipment reliability and performance improved.
• Aluminium production of 0.8 million tonnes was 9% higher than the third quarter of 2022 as we returned to full capacity at our Kitimat smelter and completed cell recovery efforts at our Boyne smelter. All our other smelters continued to demonstrate stable performance during the quarter.
• On 21 July, we announced we had entered into an agreement with Giampaolo Group, one of North America’s largest fully-integrated metal management businesses, to form a joint venture to manufacture and market recycled aluminium products. Under the terms of the agreement, Rio Tinto will acquire a 50% equity stake in Giampaolo Group’s wholly-owned Matalco business for $700 million subject to usual closing adjustments. Matalco operates six facilities in the United States and one in Canada, with the capacity to produce approximately 900,000 tonnes of recycled aluminium per annum. Receipt of customary regulatory approvals for the transaction is progressing well, with completion now expected around the end of 2023 (previously first half of 2024).
• Mined copper production of 169 thousand tonnes (on a consolidated basis), was 5% higher than the third quarter of 2022 as we benefited from the continued ramp-up of the high grade underground mine at Oyu Tolgoi and higher copper feed grades at Escondida. These benefits were partially offset by lower production at Kennecott, as the concentrator returned to full capacity during the period, recovering from the conveyor failure which occurred in March 2023.
• Refined copper production of 34 thousand tonnes, was 37% lower than the third quarter of 2022 as we completed the largest rebuild of the smelter and refinery in Kennecott’s history during the quarter. The ~$300 million rebuild incorporated approximately 300 engineering and maintenance projects, and a workforce of ~3,200. The refinery and smelter were safely restarted during the period, with production expected to ramp up during the fourth quarter. The scope of works included a rebuild of the flash converting furnace, which was restarted late in the third quarter.
• On 11 August, Simfer concluded key agreements with the Republic of Guinea and Winning Consortium Simandou (WCS) on the trans-Guinean infrastructure for the Simandou project. The Co-Development Convention with the Republic of Guinea and associated agreements create the legal framework for the co-development of more than 600 kilometres of new multi-use rail together with port facilities. During the period, Simfer and WCS also signed an investment agreement in relation to the construction of the Trans-Guinean railway and port infrastructure. Investments into the infrastructure joint venture vehicle remain subject to a number of conditions, including the finalisation and approval of the feasibility study and capital funding requirements for the project by all partners, and regulatory approvals.
• On 1 August, we announced the agreement to purchase PanAmerican Silver’s stake in Agua de la Falda S.A. (“Agua de la Falda”), a company with exploration tenements in Chile’s prospective Atacama region, and to enter a joint venture with Corporación Nacional del Cobre de Chile (“Codelco”) to explore and potentially develop Agua de la Falda’s assets.
• Titanium dioxide slag production of 247 thousand tonnes was 20% lower than the third quarter of 2022. Two furnaces at our RTIT Quebec Operations remain offline following process safety incidents in June and July which we are currently investigating.
• IOC production of 2.4 million tonnes, was 14% lower than the third quarter of 2022 as operations were impacted by extended plant downtime and conveyor belt failures, while we also recovered from wildfires which took place in Northern Quebec in the prior quarter. Given these challenges our full year production guidance has been reduced to 9.3 to 9.8 million tonnes (previously 10.0 to 11.0 million tonnes).
• In the third quarter, we commenced deployment of the Safe Production System at a further two sites, taking the total to 22 sites. The Safe Production System focuses on continuously improving safety, strengthening employee engagement and sustainably lifting operational performance across our global portfolio. While we still have a lot to do to see sustainable improvement, site deployments are rolling out according to plan and we expect to be at the upper end of our range of four to eight new sites in 2023.
• On 9 August, we announced the signing of a multi-year supply agreement for high grade direct reduction iron ore pellets from IOC’s operations with H2 Green Steel, an industrial startup establishing large scale production of green steel.
• On 5 September, we announced the appointment of Jérôme Pécresse to lead our Aluminium business, succeeding Ivan Vella. Jérôme, who was until recently President and CEO of General Electric (GE) Renewable Energy, will join Rio Tinto on 23 October 2023. Jérôme is a French citizen with over 30 years of business experience, including senior leadership roles in global companies in the mining and energy fields.
All figures in this report are unaudited. All currency figures in this report are US dollars, and comments refer to Rio Tinto’s share of production, unless otherwise stated.
2023 guidance
| Rio Tinto production share, unless otherwise stated | 2022Actuals | 2023 Sept. YTD | 2023Previous | 2023Current |
| Pilbara iron ore (shipments, 100% basis) (Mt) | 322 | 245.5 | 320 to 3351 | Unchanged |
| Bauxite (Mt) | 55 | 39.5 | 54 to 572 | Unchanged |
| Alumina (Mt) | 7.5 | 5.6 | 7.4 to 7.7 | Unchanged |
| Aluminium (Mt) | 3.0 | 2.4 | 3.1 to 3.3 | Unchanged |
| Mined copper (kt)3 | 521 | 460 | 590 to 640 | Unchanged |
| Refined copper (kt) | 209 | 129 | 160 to 190 | Unchanged |
| Diamonds (M carats) | 4.7 | 2.7 | 3.0 to 3.8 | Unchanged |
| Titanium dioxide slag (Mt) | 1.2 | 0.8 | 1.1 to 1.42 | Unchanged |
| IOC4 iron ore pellets and concentrate (Mt) | 10.3 | 7.0 | 10.0 to 11.0 | 9.3 to 9.8 |
| Boric oxide equivalent (Mt) | 0.5 | 0.4 | ~0.5 | Unchanged |
1In the upper half of the range.
2In the lower end of the range.
3Mined copper for 2023 guidance and actuals includes Oyu Tolgoi on a 100% consolidated basis following Rio Tinto’s acquisition of Turquoise Hill Resources Ltd, which completed on 16 December 2022. Mined copper for 2022 includes Oyu Tolgoi on a 33.52% Rio Tinto share basis.
4Iron Ore Company of Canada continues to be reported at Rio Tinto share.
• Guidance for 2023 IOC production has been reduced to 9.3 to 9.8 million tonnes (previously 10.0 to 11.0 million tonnes), as operations were impacted by extended plant downtime and conveyor belt failures, while we also recovered from wildfires which took place in Northern Quebec in the prior quarter.
• Pilbara iron ore shipments for 2024 are expected to be 323 to 338 million tonnes. SP10 levels are expected to remain elevated for the next few years as we work through the next tranche of mine replacement projects. Levels are dependent on the timing of approvals for planned mining areas.
• Iron ore shipments and bauxite production guidance remain subject to weather impacts.
Operating costs
• Guidance for 2023 Pilbara iron ore unit cash costs is unchanged at $21.0 to $22.5 per tonne, based on A$:US$ exchange rate of 0.70.
• Guidance for 2023 Copper C1 unit costs is unchanged 180 to 200 US cents/lb.
Investments, growth and development projects
• Pre-tax and pre-divestment expenditure on exploration and evaluation charged to the profit and loss account in the first nine months of 2023, excluding Simandou, was $613 million, compared with $506 million in the first nine months of 2022 on the same basis. Approximately 33% of the spend was by central exploration, 31% by Minerals, 27% by Copper and 8% by Iron Ore.
• Spend on Simandou in the first nine months of 2023 was $574 million (on a 100%1 basis), compared to $87 million in the first nine months of 2022.
Pilbara mine projects
• Construction of our Western Range mine remains on schedule as we advanced primary crusher pad installation, bulk earthworks and mine pre-strip.
• We advanced our next tranche of Pilbara mine replacement project studies including Hope Downs 1 Sustaining (Hope Downs 2 and Bedded Hilltop), Brockman 4 sustaining (Brockman Syncline 1), Greater Nammuldi Sustaining and West Angelas Sustaining. We are working closely with Traditional Owners and Government Regulators on Part IV environmental approvals and heritage clearances.
Oyu Tolgoi underground project
• We continue to see strong performance from the underground mine, with a total of 72 drawbells opened from Panel 0, including 18 drawbells during the quarter. The operation is expected to ramp up to deliver average mined copper production of ~500ktpa (100% basis) between 2028 and 20362.
• Shaft sinking continued during the quarter and at the end of September, shafts 3 and 4 reached 780 metres and 879 metres below ground level, respectively. Updated final depths required for shafts 3 and 4 are 1,134 and 1,176 metres below ground level, respectively. We expect both shafts to be commissioned in the second half of 2024 with shaft sinking rates continuing to meet those required for this timeline.
• Construction of conveyor to surface works continued to plan and are now approaching 75% completion as at the end of September. Construction works for the concentrator conversion also progressed during the period, with the main contractor mobilised and required tie-in works completed during a planned plant shutdown.
• During the quarter, Rio Tinto, Oyu Tolgoi and the Government of Mongolia continued to work together towards the implementation of Mongolian Parliamentary Resolution 103.
Other key projects and exploration and evaluation
• At Complexe Jonquière in Canada, we commenced early works for the $1.1 billion expansion of the AP60 aluminium smelter with low-carbon technology. The investment will add 96 new AP60 pots, increasing capacity by approximately 160,000 metric tonnes of primary aluminium per year. This new capacity, in addition to 30,000 tonnes of new recycling capacity at Arvida expected to open in the first quarter of 2025, will offset the 170,000 tonnes of capacity lost through the gradual closure of potrooms at the Arvida smelter from 2024.
• On 21 July, we announced we had entered into an agreement with Giampaolo Group, one of North America’s largest fully-integrated metal management businesses, to form a joint venture to manufacture and market recycled aluminium products. Under the terms of the agreement, Rio Tinto will acquire a 50% equity stake in Giampaolo Group’s wholly-owned Matalco business for $700 million subject to usual closing adjustments. Matalco operates six facilities in the United States and one in Canada, with the capacity to produce approximately 900,000 tonnes of recycled aluminium per annum. Receipt of customary regulatory approvals for the transaction is progressing well, with completion now expected around the end of 2023 (previously first half of 2024).
• At Kennecott, we commenced contractor mobilisation and underground activities for the $498 million investment to deliver development and infrastructure for an area known as the North Rim Skarn3 (NRS). Production from the NRS is expected to commence in 2024 and ramp up over two years, to deliver around 250 thousand tonnes of additional mined copper over the next 10 years4 alongside open cut operations.
• At the Resolution Copper project in Arizona, the United States Forest Service (USFS) continued work to progress the Final Environmental Impact Statement (FEIS) and complete actions necessary for the land exchange. We continued to advance partnership discussions with several federally-recognised Native American Tribes who are part of the formal consultation process. We are also monitoring the Apache Stronghold versus USFS case held in the US Ninth Circuit Court of Appeals. While there is significant local support for the project, we respect the views of groups who oppose it and will continue our efforts to address and mitigate these concerns.
• At the Winu copper-gold project in Western Australia, we continued to strengthen our relationships and advanced agreement making over the quarter with host Traditional Owners, the Martu and Nyangumarta groups. Drilling, fieldwork and study activities continued over the period strengthening the development pathway ahead of applications for regulatory and other required approvals.
• At the Simandou iron ore project in Guinea, negotiations continued to progress to enable the co-development of rail and port infrastructure by Simfer, Winning Consortium Simandou (WCS) and the Guinean State. On 11 August, Simfer concluded key agreements with the Republic of Guinea and WCS on the trans-Guinean infrastructure. The Co-Development Convention with the Republic of Guinea and associated agreements create the legal framework for the co-development of more than 600 kilometres of new multi-use rail together with port facilities. During the period, Simfer and WCS also signed an investment agreement in relation to the construction of the Trans-Guinean railway and port infrastructure. Investments into the infrastructure joint venture vehicle remain subject to a number of conditions, including the finalisation and approval of the feasibility study and capital funding requirements for the project by all partners, and regulatory approvals. We also continued to progress critical path works to ensure progress is maximised during the 2023 dry season, including establishing accommodation camps to support mobilisation on both our mine and rail scope, earthworks and geotechnical drilling at the port.
• On 1 August, we announced the agreement to purchase PanAmerican Silver’s stake in Agua de la Falda, a company with exploration tenements in Chile’s prospective Atacama region, and to enter a joint venture with Codelco to explore and potentially develop Agua de la Falda’s assets. Under the agreement, Rio Tinto will acquire PanAmerican Silver’s 57.74% operating stake in Agua de la Falda for $45 million and the grant of net smelter returns royalties. Codelco holds the remaining 42.26%.
• On 28 August 2023 we completed a transaction to form a joint venture that will work to unlock the development of the La Granja project in Peru, one of the largest undeveloped copper deposits in the world. On completion of the transaction, First Quantum acquired a 55% stake in the project for $105 million and will invest up to a further $546 million into the joint venture to sole fund capital and operational costs to take the project through a feasibility study and toward development.
• NutonTM, our proprietary copper heap leaching technology, made further progress during the quarter, announcing an option agreement with Excelsior Mining to further evaluate the use of our copper heap leaching technologies at Excelsior’s Johnson Camp mine in Cochise County, Arizona.
• We continue to believe that the Jadar lithium-borate project in Serbia has the potential to be a world-class asset, that will support the development of other future industries in Serbia, acting as a catalyst for tens of thousands of jobs for current and future generations, and sustainably producing materials critical to the energy transition. We are focused on consultation with all stakeholders to explore options related to the project’s future.
• At the Rincon lithium project in Argentina, development of the three thousand tonne per annum lithium carbonate starter plant is ongoing. Construction activities progressed, with the airstrip completed during the quarter, while enabling works for the process plant continued. We progressed studies for the full scale operation during the quarter, and the exploration campaign to further understand Rincon’s basin, brine and water reservoirs. We continue to engage with communities, the province of Salta and the Government of Argentina to ensure an open and transparent dialogue with stakeholders about the works underway.