Rio Tinto iron ore production slips after death halts work
Iron ore production at mining major Rio Tinto slipped in the third quarter (Q3) after the death of a worker at a mine in Western Australia.
The company said a truck operator at its Paraburdoo iron ore mine was fatally injured on 15 August and on 9 July a security contractor was killed after a “serious incident” at its Richards Bay Minerals mine.
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It said Pilbara iron ore shipments of 81.9m tonnes in Q3 were five per cent lower than Q3 2017 due to planned maintenance and safety pauses following the Paraburdoo fatality.
Its copper production was up 32 per cent higher than Q3 2017 which Rio Tinto said was due to higher grades of copper from its Kennecott mining operation in Utah.
Rio Tinto reiterated a previous warning about “headwinds” from raw materials having a $400m (£303m) impact on profit for the full-year.
Yuen Low of Shore Capital Markets said the results were "generally disappointing, with input costs in aluminium a particular concern.
"However, encouragingly, full-year guidance was largely maintained or even tweaked upwards."
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Rio Tinto chief executive Jean-Sebastien Jacques said: “We have delivered consistent operational performance in the third quarter, highlighted by strong production from the group’s copper assets.
“We made strong strategic progress with the full exit from coal, the announcement of the additional $3.2bn of share buy-backs, and the signing of a binding conditional agreement to exit Grasberg for $3.5bn.”
Rio Tinto completed the sale of its remaining coal assets for $3.95bn in August.
Last month it said it had agreed a deal to sell its interest in the Grasberg mine in Indonesia for $3.5bn to Indonesia’s state mining company.
“We continue to pursue all opportunities to improve productivity and drive enhanced cash flow generation. This, combined with the disciplined allocation of capital, will ensure we continue to deliver superior returns to our shareholders in the short, medium and long-term,” Jacques said.
Rio Tinto’s share price fell by 1.22 per cent in trading in London this morning.