Rio Tinto's (LON:RIO) Pilbara Expansion Helps Bolster Iron Ore Output

By Admin
Rio Tinto(LON:RIO) produced record volumes of iron ore in the first half of 2014 thanks in large to the expansion of its mines in the Pilbara region of...

Rio Tinto (LON:RIO) produced record volumes of iron ore in the first half of 2014 thanks in large to the expansion of its mines in the Pilbara region of Western Australia.

The UK miner increased iron ore production by 11 percent, producing 139.5 million tons in the fiscal first half despite weak prices of the metal. Rio Tinto’s shipments rose 20 percent to 142.4 million tons.

"Our iron ore expansion continues to deliver high-margin growth reinforcing our position as a low cost producer," Rio Tinto Chief Executive Sam Walsh said in a stock exchange filing.

“It has allowed us to increase shipments of our Pilbara Blend products, providing our customers with reliable, long-term supply of stable quality.”

Rio’s reliance on the commodity has caused concerns among investors. Iron ore prices have fallen from approximately $135 a ton last year to below $90 a ton last month, and many believe global mining companies are adding new supply too quickly

Miners are betting that Chinese iron ore demand will remain stout. In the first half of 2014 China imported 457 million tons of iron ore, up 19 percent from a year earlier.

BHP Billiton CEO Andrew Mackenzie believes Australia should accommodate China as much as possible, working towards the maximum degree of free trade with the nation’s biggest trading partner.

"I think it's a positive step unquestionably to more intimately tie Australia to the main market for resources going forward," said Mackenzie. "Increased ties between Australia and the rest of Asia can only be good for the health and vibrancy of this economy going forward. A country like Australia can offer them something they don't have, which is resources."

With more than 90 percent of its profits coming from iron ore, Rio Tinto believes its Pilbara mines will continue to advantageous even at lower prices, with high-cost mines in China most at risk of sustained downturn.


Featured Articles

Environmental certification for Lundin's Candelaria mine

Lundin Mining Corp has announced approval of an EIA to extend operations at the Candelaria copper mining complex in Chile

Lithium Africa and Ganfeng Lithium join hands in Africa

Lithium Africa Resources Corp. and China's Ganfeng Lithium Group Ltd. have created a 50/50 joint venture to accelerate lithium exploration and development

Mesh tech keeps Copper Mountain Mine going during outage

Rajant's Kinetic Mesh networking, BreadCrumb wireless nodes and InstaMesh networking software kept the mine safe at a critical time earlier this year

Diamond mine supports Yellowknife wildfire communities


Launch of China's first mining satellite developed with XCMC


Perpetua Resources to sign USA Department of Defense deal

Supply Chain & Operations