Rio Tinto share price: Miner updates on quarterly output
Rio Tinto (LON:RIO) has updated investors on its second-quarter output this morning.
**Highlights from the company statement:**
Rio Tinto chief executive J-S Jacques said “Rio Tinto has delivered another robust quarter of operational performance. We continue to focus on value and maximising cash flow from our assets, through both commercial and operational excellence while maintaining capital discipline. This will ensure that Rio Tinto is well-positioned to generate compelling and consistent returns for our shareholders.”
· Second quarter Pilbara iron ore sales achieved a run-rate of close to 330 million tonnes per annum (100 per cent basis) in line with annual guidance. Sales exceeded production in the quarter, partially unwinding the inventory build in the first quarter.
· Bauxite production was nine per cent higher than the first half of 2015. This enabled a five per cent increase in third party sales over the first half of 2015.
· First half aluminium production was ten per cent higher than the same period in 2015, with the modernised and expanded Kitimat smelter delivering its first full quarter at nameplate capacity.
· Mined copper was in line with the first half of 2015 as strong performances at both Rio Tinto Kennecott and Oyu Tolgoi, as well as a contribution from Grasberg, offset a weaker performance from Escondida.
· On 6 May 2016, Rio Tinto and its partners, the Government of Mongolia and Turquoise Hill Resources, announced the next stage in the development of Oyu Tolgoi. Following the approval of the underground project, over $4 billion of project financing has been drawn down.
· On 21 June 2016, Rio Tinto announced changes to its organisational structure. The Group continues to be organised into four product groups: Aluminium, Copper & Diamonds, Energy & Minerals (including Iron Ore Company of Canada) and Iron Ore, complemented by a newly-shaped Growth & Innovation group, which will focus on future assets and technical support.
Rio Tinto successfully completed two bond buy-back programmes launched in April and June, reducing gross debt by $1.5 billion and $3 billion (nominal values) respectively. The early redemption costs will decrease first half earnings by approximately $125 million.
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EXPLORATION AND EVALUATION
Pre-tax and pre-divestment expenditure on exploration and evaluation charged to the profit and loss account in the first half was $267 million (of which $139 million was spent in the second quarter), compared with $243 million in the same period of 2015.
Approximately 38 per cent of this expenditure was incurred on Energy & Minerals, 28 per cent by central exploration, 25 per cent by Copper & Diamonds and the balance on Aluminium and Iron Ore.
There were no significant divestments of central exploration properties in the quarter.
Rio Tinto has a portfolio of projects with activity in 17 countries across some eight commodities. The bulk of the exploration spend in this quarter was focused on copper targets in Australia, Botswana, Chile, Kazakhstan, Mexico, Namibia, Peru, Russia, the United States and Zambia. Mine-lease exploration continued at a number of Rio Tinto managed businesses including Pilbara Iron, Rio Tinto Coal Australia, Richards Bay Minerals, Oyu Tolgoi, Kennecott and Weipa.
As of 07:07 BST, Tuesday, 19 July, Rio Tinto plc share price is 2,462.50p.