Rio Tinto releases third quarter production results
16 October 2024
Rio Tinto Chief Executive Jakob Stausholm said: “We continue to strengthen our operations, with the roll-out of the Safe Production System delivering consistent production at our Pilbara iron ore business and a step change from our Australian bauxite mines. We are building on this, with more work to do across our global portfolio.
“We progressed our major projects to deliver profitable organic growth. We are on track for first production from our Simandou high-grade iron ore project next year and first lithium from the Rincon starter plant by the end of this year. Meanwhile the ramp-up of copper production continues at the Oyu Tolgoi underground mine.
“We announced the acquisition of Arcadium Lithium, bringing a world-class lithium business alongside our leading aluminium and copper operations to supply materials needed for the energy transition. This is aligned with our strategy and our disciplined capital allocation framework, increasing our exposure to a high-growth, attractive market at the right point in the cycle.
“The decarbonisation of our business remains a priority and is progressing well. We took another important step in securing a long-term future for the Boyne Smelter, announcing a partnership with the Queensland Government to support investment in renewable energy projects.
“Our long-term pathway to deliver profitable growth and create shareholder value remains clear, as we progress our business in line with our four objectives.”
| Production1 | Q32024 | vs Q3 2023 | vs Q2 2024 | 9 MTHS2024 | vs 9 MTHS2023 | |
| Pilbara iron ore shipments (100% basis) | Mt | 84.5 | +1% | +5% | 242.9 | -1% |
| Pilbara iron ore production (100% basis) | Mt | 84.1 | +1% | +6% | 241.5 | -1% |
| Bauxite | Mt | 15.1 | +8% | +3% | 43.2 | +9% |
| Aluminium2 | kt | 809 | -2% | -2% | 2,459 | +1% |
| Mined copper (consolidated basis) | kt | 168 | -1% | -2% | 495 | +8% |
| Titanium dioxide slag | kt | 263 | +7% | +11% | 755 | -10% |
| IOC3 iron ore pellets and concentrate | Mt | 2.1 | -11% | -3% | 6.9 | -1% |
1 Rio Tinto share unless otherwise stated.
2 Includes primary aluminium only.
3 Iron Ore Company of Canada.
Q3 2024 operational highlights and other key announcements
• Our all injury frequency rate (AIFR) for the third quarter was 0.40, an increase from the second quarter of this year (0.31) and the third quarter of 2023 (0.35). We continue to prioritise learning from safety incidents to improve the effectiveness of our critical controls. The health, safety and wellbeing of our people and partners remains at the heart of everything we do.
• We are on track to deliver our ambition to grow overall copper equivalent production (based on long-term consensus pricing) by around 3% of compound annual growth from 2024 to 2028 from our existing portfolio and projects already in execution.
• In the Pilbara, we produced 84.1 million tonnes (Rio Tinto share 71.0 million tonnes) in the third quarter, 1% higher than the corresponding period of 2023. Productivity gains continue to offset ore depletion. Shipments of 84.5 million tonnes (Rio Tinto share 72.5 million tonnes) were also 1% higher than the third quarter of 2023.
• Bauxite production of 15.1 million tonnes was 8% higher than the third quarter of 2023. The improvement continues to be driven by higher plant availability and utilisation rates owing to the implementation of the Safe Production System, especially at our Amrun mine at Weipa, which is operating above nameplate capacity.
• Aluminium production of 0.8 million tonnes was 2% lower than the third quarter of 2023. Production at our New Zealand Aluminium Smelter (NZAS) was impacted by a call from Meridian Energy to reduce its electricity usage by 185 MW from early August. The call for reduced usage, for which we are compensated, has now ended and the smelter ramp-up commenced in late September. The ramp-up is expected to run through to the second quarter of 2025.
• Mined copper production of 168 thousand tonnes (consolidated basis) was 1% lower than the third quarter of 2023.
◦ Kennecott was 44% lower than the third quarter of 2023. As we identified in our second quarter operations review, highwall movement was monitored along two major faults during that period. This movement has limited our ability to access the primary ore face on the south wall and is increasing the need to supplement feed to the concentrator with lower grade stockpile ore, impacting mined copper production by approximately 50 thousand tonnes in 2024. A group of experts, both internal and external, reworked Kennecott’s mine plan and the results were assessed during the quarter. The highwall movement will continue to restrict ore deliveries from the primary ore face and impact mined copper production in 2025 and 2026. We are working through this change in mining sequence and will provide a further update at our Investor Seminar in December.
◦ Escondida was 15% higher than the third quarter of 2023 due to higher ore grades being fed to the concentrators (1.00% versus 0.85%) in line with the mining sequence, together with increased recovery.
◦ Oyu Tolgoi was 19% higher than the third quarter of 2023 due to the ramp-up in production and higher grade from the underground mine. However, production was 5% lower than the previous quarter mainly due to planned maintenance at the concentrator and adverse weather impacting open pit operations. Production from the underground mine was marginally impacted by a minor delay to the start of commissioning of the conveyor to surface, with first ore on belt now expected in the second half of October. The underground mine delivered a copper head grade of 2.05% (vs 1.73% in the third quarter of 2023) with an overall copper head grade of 0.67% (vs 0.52%).
• Titanium dioxide slag production was 7% higher than the third quarter of 2023 due to improved smelter stability and performance. A furnace reconstruction continues at our RTIT Quebec Operations, and we continue to operate six out of nine furnaces in Quebec and three out of four at Richards Bay Minerals (RBM).
• IOC production was 11% lower than the third quarter of 2023 due to an 11-day site-wide shutdown following forest fires in mid-July. This resulted in a revised mine plan and maintenance schedule, leading to a reduction in our full year iron ore pellets and concentrate production guidance to 9.1 to 9.6 million tonnes (previously 9.8 to 11.5 million tonnes).
• In the third quarter, deployment of the Safe Production System (SPS) continued, now reaching 28 sites (an increase of two from the second quarter). We continue to deepen the maturity of SPS and are on track to deliver a 5 million tonne year-on-year production uplift at Pilbara Iron Ore.
• On 17 July, we announced the appointment of Katie Jackson to lead the Copper business, succeeding Bold Baatar, who as of 1 September, has moved to the role of Chief Commercial Officer.
• We hosted a site visit for the financial community to our Aluminium and Iron & Titanium operations in Quebec, Canada during September. In the management presentation, we set out a clear pathway to raise both the EBITDA margin and Return on Capital Employed (ROCE) for our Aluminium business by five percentage points by 2030. We also set out a targeted increase in ROCE at our Iron & Titanium business of nine percentage points by 2030 and a pathway to reach concentrate capacity of 23 million tonnes (100% basis) of high-grade iron ore at IOC. Presentations by management also covered technology, decarbonisation and markets.
• Subsequent to the end of the quarter, we announced a definitive agreement to acquire Arcadium Lithium plc (Arcadium) in an all-cash transaction for US$5.85 per share. This transaction will bring Arcadium’s world-class, complementary lithium business into our portfolio, establishing a global leader in energy transition commodities. Subject to satisfaction of the outstanding conditions, the transaction is expected to close in mid-2025.
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.
2024 guidance
| Rio Tinto production share, unless otherwise stated | 2023 Actuals | 2024 Sept YTD | 2024Previous | 2024Current |
| Pilbara iron ore (shipments, 100% basis) (Mt) | 331.8 | 242.9 | 323 to 338 | Unchanged |
| Bauxite (Mt) | 54.6 | 43.2 | 53 to 561 | Unchanged |
| Alumina (Mt) | 7.5 | 5.3 | 7.0 to 7.3 | Unchanged |
| Aluminium (Mt) | 3.3 | 2.5 | 3.2 to 3.4 | Unchanged |
| Mined copper (consolidated basis) (kt) | 620 | 494.7 | 660 to 7202 | Unchanged |
| Refined copper (kt) | 175 | 179.6 | 230 to 260 | Unchanged |
| Titanium dioxide slag (Mt) | 1.1 | 0.8 | 0.9 to 1.1 | Unchanged |
| IOC3 iron ore pellets and concentrate (Mt) | 9.7 | 6.9 | 9.8 to 11.5 | 9.1 to 9.6 |
| Boric oxide equivalent (Mt) | 0.5 | 0.4 | ~0.5 | Unchanged |
1 Around the top end.
2 Around the bottom end.
3 Iron Ore Company of Canada continues to be reported at Rio Tinto share.
• Guidance for 2024 IOC iron ore pellets and concentrate production has been reduced to 9.1 to 9.6 million tonnes (previously 9.8 to 11.5 million tonnes) following an 11 day site-wide shutdown due to forest fires in mid-July.
• Expectations for Pilbara iron ore shipments in 2024 remain at 323 to 338 million tonnes. SP10 levels are expected to remain elevated until replacement projects are delivered. This guidance remains subject to the timing of approvals for planned mining areas and heritage clearances.
• Iron ore shipments and bauxite production guidance remain subject to weather impacts.
Operating costs
• 2024 Pilbara iron ore unit cash costs are expected to be in the upper half of our $21.75 to $23.50 per tonne guidance (based on an average A$:US$ exchange rate of 0.66). This is due to inflation being at the higher end of our expectations.
• Guidance for 2024 copper C1 unit costs is unchanged at 140 to 160 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 2024 was $692 million, compared with $613 million in the first nine months of 2023 (excluding Simandou). Approximately 24% of the spend was by central exploration, 30% by Minerals (with the majority focusing on lithium), 31% by Copper, 14% by Iron Ore and 1% by Aluminium. In 2024, all qualifying expenditure relating to Simandou is being capitalised. Qualifying expenditure on the Rincon project has been capitalised since 1 July 2024.
Pilbara projects
• Construction of our Western Range mine is now 80% complete. During the quarter, we finalised commissioning of the autonomous haul trucks and completed the Paraburdoo upgrade works. We continue to focus on construction of the greenfield crushing and screening plant and Paraburdoo plant tie-in, with first ore from that new system on plan for 2025.
• We continue to advance our next tranche of Pilbara mine replacement studies including Hope Downs (Hope Downs 2 and Bedded Hilltop), Brockman 4 (Brockman Syncline 1), Greater Nammuldi and West Angelas projects. During the quarter, funding approval for full execution was obtained for the Hope Downs replacement project and the environmental and heritage approvals are progressing. Project timelines remain subject to timing of approvals and heritage clearances with the Greater Nammuldi project remaining divergent from the original development schedule.
• The Rhodes Ridge pre-feasibility study, which is targeting an initial capacity of up to 40 million tonnes per year, subject to relevant approvals, remains on track to be completed in 2025. First ore is expected by the end of the decade.
• Early works at our Coastal Water desalination project have commenced, with mobilisation of the earthworks contractor. The $395 million plant will provide water to our port operations in Dampier. At full capacity, it will produce approximately 4GL/year to reduce draw from the Bungaroo aquifer to sustainable levels. We are assessing a further phase of the project.
• We are progressing engineering works for the replacement of all three of the bucketwheel reclaimers and associated infrastructure within the Parker Point Stockyard at our Dampier Port. Commissioning of all replacement reclaimers is planned to be completed by the first half of 2029.
Oyu Tolgoi underground project
• Ventilation Shafts 3 and 4 were commissioned during the quarter with fresh air now being drawn into the underground mine.
• Construction work on the conveyor to surface was 98% complete at the end of the quarter and, after a minor delay to the start of the commissioning, we expect first ore on the belt in the second half of October.
• Construction works for the concentrator conversion is ongoing. Commissioning is expected to be progressively completed from the fourth quarter of 2024 through to the second quarter of 2025.
• Construction of primary crusher 2 is progressing to plan and remains on track to be completed by the end of 2025.
Simandou iron ore project
• As we reported in our Second Quarter Operations Review, all conditions for Rio Tinto’s investment to develop the Simandou high-grade iron ore deposit in Guinea were satisfied, with the transaction closing in July.
• The Simfer mine1 is on track to deliver first production in 2025, ramping up over 30 months to an annualised capacity of 60 million tonnes per year2 (27 million tonnes per year Rio Tinto share).
• For the Simfer mine, progress continues on plan, despite productivity being impacted by wet weather during the quarter. Mine process plant installation early works and non-process infrastructure contracts were awarded during the period. First blasting activities on our mining concession also took place. The two initial crushers required to produce first ore for commissioning have arrived in Guinea.
• During the third quarter, a number of the critical milestones for 2024 have been achieved for the Simfer infrastructure scope. The laying of sleepers and track has commenced, with progress expected to accelerate next quarter with the arrival of track laying locomotives. For the bridge construction works, we have completed the piers and commenced laying bridge platforms. Tunnel excavation activity is now more than 50% complete and activities at the port have advanced, with transhipment vessel (TSV) wharf construction and car dumper excavation commencing.
• The current total workforce across all the Simfer scope of mine, rail and port is 10,800 with 85% national Guinean participation.
Other key projects and exploration and evaluation
• At Complexe Jonquière in Quebec, the AP60 expansion project remains on schedule. Construction activities progressed, with assembly of the gas treatment centre commencing during the quarter. Once completed, the project will add 96 new AP60 pots, increasing AP60 capacity by 160,000 tonnes of primary aluminium per year by the end of 2026. This new capacity, in addition to 30,000 tonnes of new recycling capacity at Arvida expected to open in the fourth quarter of 2025, will offset the 170,000 tonnes of capacity lost through the gradual closure of potrooms at the Arvida smelter from 2024.
• At Kennecott, activities continued on the North Rim Skarn (NRS) underground development and infrastructure. Production from NRS is forecast to commence in mid-2025, delivering around 250,000 tonnes through to 20333.
• At the Resolution Copper project in Arizona, the Apache Stronghold filed a petition to the U.S. Supreme Court requesting to hear its case to stop the land exchange between Resolution Copper and the federal government. The San Carlos Apache Tribe also filed a second petition with the U.S. Supreme Court, asking the Court to review a decision by the Arizona Supreme Court regarding a water discharge permit issued to Resolution Copper by the State of Arizona. We continue to progress the Final Environmental Impact Statement with the United States Forest Service, but they have yet to advise on the date of re-publication. We also advanced partnership discussions with federally-recognised Native American Tribes. 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 concerns.
• We continue to work with the Traditional Owners to progress the Winu copper-gold project, which remains subject to all of the required approvals. Drilling, studies and fieldwork to advance the key environmental permitting and Project Agreement negotiations with Nyangumarta and the Martu remain our priority.
• Nuton, our copper heap leaching technology venture, continues to develop its path towards deployment with ten partnerships in five countries: United States, Mexico, Chile, Peru and Argentina.
• At the Rincon lithium project in Argentina, development of the 3,000 tonne per year lithium carbonate starter plant continues to progress, with construction activities now over 70% complete. Commissioning of medium and low voltage substations has commenced and we continue to expect first production from the starter plant by the end of 2024. The feasibility study for full-scale operation is nearing completion, with a final investment decision expected in the fourth quarter of 2024. 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.
• We continue to believe that the Jadar project has the potential to be a world-class lithium-borates asset that could act as a catalyst for the development of other industries and thousands of jobs for current and future generations in Serbia. The decision that allowed the reinstatement of the spatial plan for the Jadar project by Serbia’s Constitutional Court in July has been followed by the application process for obtaining the Exploitation Field Licence (EFL) being initiated, with a submission planned for December 2024. The EFL is essential for commencing fieldwork, including detailed geotechnical investigations, while cultural heritage and environmental surveys have resumed. The Environmental Impact Assessment process has also begun, with scoping and content for the mine currently under public consultation. This step formalises discussions through legally mandated consultations, which the project supports, to encourage an open, fact-based dialogue.