SYDNEY: Mining giant Rio Tinto reported Tuesday a ramp up in iron ore shipments on surging prices, but copper output disappointed amid production issues at its global mines.
Prices in key commodities such as iron ore have soared in recent months, supporting producers, with shares in Rio Tinto jumping more than 60 percent from a year ago.
Rio said iron ore shipments rose by three percent to 327.6 million tonnes last year compared to 2015, in line with guidance. Production lifted by six percent for 2016 to 329.5 million tonnes.
“We have delivered a strong operational performance in 2016, underpinned by our drive for efficiency and maximising cash flow,” Rio chief executive Jean-Sebastien Jacques said in a statement.
“Our disciplined approach remains in place in 2017, with the continued focus on productivity, cost reduction and commercial excellence.”
Iron ore shipments were up eight percent in the last three months of 2016 compared to the previous quarter, while production for the same period rose by three percent.
Rio had continued to expand iron ore output even as commodity prices tumbled before the recent rebound, as well as to slash spending and wind back capital expenditure.
Analysts said the Anglo-Australian miner was well-placed to withstand any headwinds in the market.
“Rio Tinto has produced another solid production report, containing little to concern investors or change the market outlook,” CMC Markets chief analyst Ric Spooner said in a note.
“Overall, the company is now well placed to withstand any down in metals prices with a strong balance sheet and prospects of further gains in productivity.”
Shares in Rio closed 0.82 percent lower to Aus$62.70 in Sydney on Tuesday.
Copper output was up four percent to 523 thousand tonnes last year compared to 2015, but was below full-year guidance amid lower-than-expected production at the Kennecott copper mine in Utah which was affected by a landslide in 2013.
Rio also reported that no copper was delivered under its 40 percent share of mined material at the Freeport-McMoRan-owned Grasberg mine in eastern Papua province, Indonesia, for the fourth-quarter, as the production threshold was not exceeded.
The miner issued a wide copper production guidance of 525-665 thousand tonnes for this year, and unchanged guidance of 330-340 million tonnes for iron ore for the same period.