Miner Rio Tinto Reports Mixed Results for Fourth-Quarter Production
Metals miner Rio Tinto (NYSE:RIO) (London, England) reported an increase in fourth-quarter iron ore production from the same period in 2019, but continues to see a decrease in mined copper. Industrial Info is tracking more than $26 billion in projects belonging to Rio Tinto worldwide, including $9.6 billion worth in North America.
Iron ore production, which stems from the Pilbara operations in northwest Australia, totaled 86 million metric tons--up 3% from fourth-quarter 2019. This comes after first-quarter impacts from Cyclone Damien and COVID-19 disruptions, which resulted in maintenance at the site being deferred to the second half of the year. Production in 2020 was 333.4 million metric tons, a 2% increase from the year prior.
Mined copper was 4% less in the fourth quarter than in the same period of 2019. Overall production for 2020 was 25% lower than in 2019, due to a 28% reduction in grade.
Aluminum production in the fourth quarter increased 4% year-over-year; bauxite was down 12%, the result of a train failure in Australia and phasing throughout the year to address customer needs.
Rio Tinto noted short-term economic activity will continue to take a hit due to COVID-19, but monetary and fiscal policies should prop up commodity demand. Positive signs are emerging: China's industrial sector has recovered; iron ore prices rose in the second half of 2020; and copper prices remain strong.
As part of its Resolution underground copper mine project in Superior, Arizona, the Shaft No. 9 remediation and sinking project was completed in November, four months ahead of schedule, the company said.
The Resolution project is now in the next phase of public consultation in its ongoing permitting process, after the outgoing Trump administration and the U.S. Forest Service published their final Environmental Impact Statement (EIS) on January 15. The report gives Rio Tinto the rights to additional land east of Phoenix for the project, in exchange for nearby acreage.
After the permitting process, an ongoing detailed feasibility study over several years will help determine investments. Building out the mining infrastructure could take around 10 years. The mine could supply one quarter of the U.S. copper demand, or 6 million tons based on 2019 demand, according to Rio Tinto.
However, the decision was met with swift opposition from Arizona's San Carlos Apache tribe, which filed a federal lawsuit in the U.S. District Court of Arizona to stop the transfer of sacred tribal land, according to Reuters.
Rio Tinto has pledged to continue to work with Native American tribes and seek approval before any project development decisions. "Consultation with Native American tribes and local communities has led to significant changes to the project and shaped an extensive package of initiatives we expect to invest in across the mine's life," said Arnaud Soirat, Chief Executive of Copper & Diamonds. "This is a starting point from which we are committed to continue building constructive relationships."
Meanwhile, the Phase I wall pushback project at its Kennecott Bingham Canyon Copper Mine in Utah remains on track. Completion is scheduled for June. The $1.5 billion Phase II will extend the mine life out to 2032, plus include upgrades to produce an additional 1 million tons of refined copper between 2026 and 2032. The latter has a medium probability (70-80%) of moving forward as scheduled, according to Industrial Info's project database. For more information, see Industrial Info's project reports on Phase I and Phase II.
In Canada, construction is well underway on an addition at the company's Arvida Aluminum Smelter in Jonquiere, Quebec. The new research and development facility and pilot plant will create technology that eliminates all direct greenhouse gases from the aluminum smelting process, and instead produce pure oxygen as byproduct. Completion is expected in March. For more information, see Industrial Info's project report.
Scheduled for completion in July, a $447 million aluminum smelter modernization in Set-Iles, Quebec, will convert the anode baking furnaces to run on natural gas. The project also will help integrate autonomous electric vehicles, replacing diesel equipment. For more information, see Industrial Info's project report.