Boom times for the world’s major iron ore miners.
Rio Tinto says it is on track to hit the upper end of its 2018 guidance for iron ore shipments after sales from its mines in WA’s Pilbara rose 14% in the June quarter from the same period last year.
At the same time, Vale, the biggest iron ore miner, revealed overnight Monday that its production is also running at record levels. Vale, the world’s leading iron ore producer, said in a filing late on Monday it produced a record 96.8 million tonnes of iron ore in the period despite disruptions from a nationwide truck strike in Brazil in May.
The miner also recorded record sales of 86.5 million tonnes in the second quarter, up more than 5% from the same period in 2017.
BHP releases its 4th quarter and 2017-18 production and sales data later today and will probably confirm a similar performance.
Rio said yesterday that as a result of the strong June quarter it expects shipments in 2018 to be at the upper end of its existing guidance range of 330 million to 340 million tonnes.
Rio’s Pilbara iron ore operations have produced a massive 168.7 million tonnes in the first half of 2018, up 7% on the first half of 2017. Iron ore production for the June quarter of 2018 also climbed 7%, to 85.5 million tonnes.
The increase in iron ore production from two of the three biggest iron ore miners comes amid growing concern among analysts about the potential impact of trade tensions on commodities demand in China.
So far there has been any impact, but it is early on in the dispute between the US and China, as well as the US and EU.
“Operational performance was solid across most commodities, rounding out a strong first-half performance for the group. Our increasingly flexible Pilbara iron ore system continued to perform well,” Rio Tinto chief executive Jean-Sebastien Jacques said in a statement yesterday with the report.
“Our bauxite and copper businesses also delivered strong operating results, demonstrating the success of our ongoing mine-to-market productivity program, which is increasingly important in an environment of rising cost inflation," he said.
Other highlights from the company’s latest operations review included a 26 per cent rise in mined copper production in the quarter to 156,800 tonnes.
Rio said this reflected “strong production at Escondida following a labour union strike in the first half of last year”. But there could be a return of the industrial problems with negotiations still underway. The current contract ends on August 1.
Hard coking coal production was also up significantly on the same period last year (40%), thanks mostly to the impact of Cyclone Debbie on operations in 2017
Rio said bauxite production rose 3% to 13.3 million tonnes. Third party shipments increased by ten per cent to 8.7 million tonnes due to firm demand. Aluminium production of 0.9 million tonnes was 3% lower than the second quarter of 2017 due primarily to labour disruptions at the non-managed Becancour smelter in Canada and a power interruption at the Dunkerque smelter in France.
Rio shares eased 0.3% to $79.16 in a market down around half a per cent.
