Rio Tinto has reported its 3Q17 coal production results.
The mining giant’s hard coking coal production in the quarter was 3% higher than in 3Q16 and significantly higher than the previous quarter as operations normalised at Hail Creek following the impact of Cyclone Debbie earlier in the year.
As announced on 1 September 2017, Rio Tinto completed the sale of Coal & Allied to Yancoal Australia for total consideration of AUS$2.69 billion, which included Coal & Allied's interests in the Hunter Valley Operations, Mount Thorley and Warkworth mines. The sale resulted in semi-soft coking coal and thermal coal production being lower than the previous quarter by 28% and 23% respectively. The sale, coupled with mine production sequencing changes at Hunter Valley Operations and Mount Thorley Warkworth, led to a 58% reduction in semi-soft coking coal production compared to the third quarter of 2016.
Following the divestment of Coal & Allied, Rio has revised its expected share of 2017 production to 13 – 14 million t of thermal coal (previously 17 – 18 million t) and 2 million t of semi-soft coking coal (previously 3.3 – 3.9 million t). Guidance for Rio Tinto’s expected share of 2017 production is unchanged at 7.2 – 7.8 million t of hard coking coal, 11.4 – 12.4 million t of iron ore pellets and concentrates, 0.5 million t of boric oxide equivalent production, 1.2 – 1.3 million t of titanium dioxide slag, and 6.5 – 7.5 million pounds of uranium.
In the company’s release, Rio Tinto chief executive J-S Jacques said: “The business performed very well in the September quarter, with a strong quarterly production performance and a wave of productivity improvements embedded through our operations. In particular, we are making good progress with further improvements to our world-class Pilbara iron ore business, including the opening of the Silvergrass mine and the implementation of AutoHaul™. We continue to shape our asset portfolio and announced $2.5 billion of additional returns to shareholders from the proceeds of the Coal & Allied sale, demonstrating the robustness of our strategy and ability to invest in high-value growth whilst returning excess cash to shareholders. We have announced over $8 billion of cash returns in 2017. Our relentless focus on cash generation and disciplined capital allocation will continue to deliver superior returns for our shareholders.”