- Rio Tinto (ASX:RIO) releases Q3 CY23 production update data
- The company’s Pilbara iron ore operations remained flattish stable while copper is on the way up
- Rio’s CEO Jakob Stausholm focused specifically on “future” metals in his commentary
- The company is set to expand five WA iron ore mines in the coming years
- Chinese economic stimulus measures from its central bank have also boosted the company as iron ore rises
- Shares are up 2.46 per cent, trading at $118.57 at 12:14 pm AEDT
Rio Tinto (ASX:RIO) has released a production update for Q3 of CY23, showing Pilbara iron ore production remains flat year-on-year (YoY), while copper production has been boosted by the Mongolian Oyu Tolgoi mine.
Q3 2023 Pilbara iron ore shipments sat at 83.9 million tonnes (Mt), a rise of one per cent over Q3 2022 YoY.
Pilbara iron ore production, meanwhile, was down a per cent at 83.5Mt YoY.
On the whole, iron ore dynamics at the Pilbara remain flat YoY, but looking at quarter-by-quarter performance, shipments were six per cent higher over Q2 2023 and production was up three per cent over the same period.
Meanwhile, the ramp-up of copper mining at the Oyu Tolgoi copper mine in Mongolia – one of the largest in the world – saw the company hit 169,000 tonnes of mined copper production, up five per cent YoY.
In a recent tour provided to investment analysts by the company, Rio also flagged its ongoing expansion of five lesser-known WA iron ore projects – Western Range, West Angeles, Hope Down, Greater Nammuldi and Brockman 4.
Metals of the future
Notably, Rio’s CEO Jakob Stausholm highlighted aluminium in particular as part of its “portfolio of materials needed for the future.”
“We took real steps … signing agreements that will see us take a leading position in recycled aluminium in North America,” he said.
“We continued to make good headway ramping up our Oyu Tolgoi high-grade underground copper mine, our Kitimat aluminium smelter returned to full production, and we safely restarted the smelter and refinery at Kennecott after completing the largest rebuild in its history.”
Kennecott refers to Rio’s US-based Utah copper mining project of the same name.
Decarbonisation between the lines
In between the lines, Rio’s CEO focused strongly on the fundamental metals needed for decarbonisation to truly ‘work’ in his commentary to markets.
Electrification of world power grids requires hard-to-imagine volumes of the orange metal copper, from a wires and poles perspective, as well as looking at batteries, wind farms, solar, and more.
Even nuclear power plants require huge amounts of the stuff – in the range of 700 tonnes.
Rio’s Oyu Tolgoi mine in Mongolia is also a keystone asset in this regard. Recycled aluminium also has decarbonisation angles.
In short, companies can boast lower CO2 load liability by recycling aluminium which can in theory be infinitely re-used and recycled without loss of quality.
Aluminium production YoY boost
Bauxite production – a key feedstock for aluminium – was two per cent higher YoY to 13.9 million tonnes with a big boost coming from the Weipa play.
Aluminium production of 0.8Mt sat up nine per cent higher YoY, driven by full capacity operations at Rio’s other major smelter, Kitimat and Boyne.
“All our other smelters continued to demonstrate stable performance during the quarter,” Rio today wrote.
Chinese economy iron ore speculation
Rio Tinto has also climbed 2.63 per cent in morning trades in part on the back of commodity price strength for iron ore.
The upward move comes following reports the People’s Bank of China has added liquidity into the economy to support the banking system – with traders betting that stimulation will follow, particularly in construction.
All the major miners have risen on the news, including BHP (ASX:BHP) and Fortescue (ASX:FMG).
Rio shares were up 2.46 per cent, trading at $118.57 at 12:14 pm AEDT.