Rio Tinto PLC on
Tuesday reported higher fourth-quarter production of most of its commodities,
including iron ore and aluminum. Mined copper output was slightly lower
year-on-year, it said. Here are some remarks from the fourth-quarter operations
report of the world's No. 2 miner by market value.
On Australian
iron-ore operations:
"Pilbara
operations produced 324.1 million [metric tons] (100% basis) in 2022, 1% higher
than 2021. Shipments were 321.6 million tons (100% basis), in line with 2021. Performance
improvements continued across the system and we achieved record second-half
performance across the mine and rail system. We expect Gudai-Darri to reach its
nameplate capacity on a sustained basis during 2023."
On iron-ore
markets:
"Iron ore Platts
CFR prices rebounded 22% in the quarter, although the average price of $99/ton
in the fourth quarter was 4% lower than the third quarter. Market sentiment
strengthened after Beijing released three stimulus packages in November to
stabilize the real estate market by lifting all previously applied financing
constraints on property developers. Prices trended above $110 at year-end as
China began dismantling its zero-Covid policy and gradually reopening the
economy, while mills also started to replenish in-plant inventories ahead of
the Lunar New Year holidays. Steel demand recovery hinges on the country's
ability to control the Covid outbreak."
On copper
production:
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"Mined copper
production of 521,000 tons was 6% higher than 2021 due to higher grades at
Kennecott and Escondida, partly offset by lower grades and recoveries at Oyu
Tolgoi as a result of planned mine sequencing. Unplanned maintenance was
required at Kennecott in the fourth quarter of 2022 in our anode furnaces
leading to extended downtime and continued poor anode production, likely to
result in weak cathode production in the first quarter of 2023. Refined copper
production at Kennecott will continue to be challenged due to the smelter and
refinery performance, until we undertake the largest rebuild in nine years
which is planned for the second quarter of 2023 and is expected to take
approximately three months."
On copper markets:
"The copper
LME price rose 10% in the fourth quarter to $3.80 [a pound], as market
sentiment turned more positive on a series of supply disruptions and low and
declining visible stocks, which remain at historically low levels. Price
support came in the form of Chinese government policy changes such as in the
property market and easing Covid-19 restrictions, together with demand growth
in renewables and EVs, plus the return of the investor net long position in
copper."
On aluminum output:
"Aluminum
production of 3.0 million tons was 4% lower than 2021 due to reduced output at
our Kitimat smelter in British Columbia, Canada and Boyne smelter in
Queensland, Australia. The rate of pot restarts at Kitimat picked up in the
fourth quarter and Boyne smelter cell recovery efforts continued. Recovery at
both smelters is progressing with full ramp-up expected to be completed during
the course of 2023. All of our other aluminum smelters continued to demonstrate
stable performance."
On aluminum
markets:
"The LME cash
aluminum price increased 8% in the quarter, although the average price of
$2,324 in the fourth quarter was 1% lower than the third quarter. The market
was supported by low reported levels of inventories, and expectations of
improving Chinese demand. In North America, shipments of extrusions and rolled
products softened over the quarter, mainly on weaker extrusion shipments into
the building and construction sector. Aluminum demand growth from renewables
and electric vehicles (EVs) remains firm. LME stocks are now at their lowest
level in 22 years, and Chinese warehouse stocks are at a six-year low."
On titanium dioxide
operations:
"Titanium
dioxide slag production of [1.2 million tons] was 18% higher than 2021, due to
community disruptions at Richards Bay Minerals (RBM) in South Africa in 2021,
and continued improved performance of operations at Rio Tinto Fer et Titane
(RTFT), Canada. Production constraints related to nationwide electrical power
load-shedding at RBM were experienced in the fourth quarter."
On Canadian
iron-ore operations:
"Iron Ore
Company of Canada (IOC) production of pellets and concentrate was 6% higher
than 2021. Successful deployment of the Rio Tinto Safe Production System (SPS)
at the concentrator was completed in the year, with record performance metrics
achieved in the year, including monthly records for concentrate production and
total material moved in the second quarter. Planning for SPS deployment at the
pellet plant commenced in December."