Rio Tinto releases 4Q21 production results
Published by Jessica Casey,
Global Mining Review,
Rio Tinto Chief Executive, Jakob Stausholm, said: “In 2021, we continued to experience strong demand for our products while operating conditions remained challenging, including due to prolonged COVID-19 disruptions. Despite this, we progressed a number of our projects, including the Pilbara replacement mines, underlining the resilience of the business and the commitment and flexibility of our people, communities and host governments. We are seeing some initial positive results from the implementation of the Rio Tinto Safe Production System, which we will significantly ramp up in 2022, as we continue to work hard to improve our operational performance to become the best operator.”
“In 4Q21, we set a new direction for the company and announced a number of partnerships focused on decarbonising the value chain for our products, including green steel. We also entered into a binding agreement to acquire the Rincon lithium project in Argentina, which is strongly aligned with our strategy. These actions will ensure we continue to deliver attractive returns to shareholders, invest in sustaining and growing our portfolio, and progress our ambition to net-zero carbon emissions.”
2021 operational highlights and other key announcements
- The safety and well-being of the company’s employees and contractors remains its priority. Fatigue, labour shortages and other pressures from COVID-19 have heightened the safety risk in day-to-day operations and been a reminder that there is no room for complacency. Rio Tinto experienced its third consecutive year with no fatalities at its managed operations, and is working hard with its partners to achieve the same results at its non-managed assets and marine operations.
- Pilbara iron ore production of 319.7 million t (100% basis) was 4% lower than 2020. This is due to above average rainfall in 1H21, cultural heritage management and delays in growth and brownfield mine replacement tie-in projects. Pilbara shipments in 2021 were 321.6 million t (100% basis), 3% lower than 2020, and included elevated levels of SP10 product as a result of delays in growth and brownfield mine replacement tie-in projects.
- Bauxite production of 54.3 million t was 3% lower than 2020 due to severe wet weather in 1Q21 impacting system stability throughout the year, equipment reliability issues and overruns on planned shutdowns at the Pacific operations.
- Aluminium production of 3.2 million t was 1% lower than 2020 due to reduced capacity at the Kitimat smelter in British Columbia following the strike which commenced in July 2021. The labour union and employees have reached an agreement with controlled restart in 2022.
- Mined copper production of 494 000 t was 7% lower than 2020 due to lower recoveries and throughput at Escondida as a result of the prolonged impact of COVID-19, partly offset by higher recoveries and grades at Oyu Tolgoi in Mongolia and Kennecott in the US.
- Titanium dioxide slag production of 1 014 000 t was 9% lower than 2020 as a result of community disruptions and subsequent curtailment of operations at Richards Bay Minerals (RBM) coupled with unplanned maintenance and equipment reliability issues at Rio Tinto Fer et Titane (RTFT) in Canada. On 24 August, RBM resumed operations following stabilisation of the security situation, supported by the national and provincial government, as well as substantive engagement with host communities and their traditional authorities.
- Production of pellets and concentrate at Iron Ore Company of Canada (IOC) was 6% lower than 2020 due to prolonged labour and equipment availability issues impacting product feed and various other operational challenges throughout the year.
- At the Jadar lithium-borate project in Serbia, as a result of delays in the approval of the exploitation field licence (EFL), which is a prerequisite to publish the environmental impact assessment (EIA) and commence the consultation process, the company is revising development timelines. Based on current estimates and subject to receiving all relevant approvals, permits and licences, first saleable production is expected to be no earlier than 2027 (previously 2026).
- In 4Q21, Rio Tinto entered into several partnerships to accelerate decarbonising our own business and the value chains its operate in. In November, its announced the ELYSIS joint venture successfully produced aluminium without any direct greenhouse gas emissions from commercial-size cells.
- On 20 October, the company outlined the actions being taken to strengthen the business and improve performance. It unveiled a longer-term strategy to ensure it thrives in a decarbonising world and continues to deliver attractive shareholder returns, in line with its policy.
- This year, the company initiated the Rio Tinto Safe Production System (RTSPS) at five pilot sites, focusing on sustainably unlocking capacity across the system. It is already seeing returns in the first year of rollout, including a significant improvement at the Kennecott concentrator since the July deployment compared to the previous 12 months performance. A significantly larger programme is planned for 2022, subject to COVID-19 constraints, with the RTSPS rollout of up to 30 deployments at 15 sites as well as up to 80 rapid improvement projects which aim at improving targeted bottlenecks.
- On 28 October, the company issued US$1.25 billion 30-year fixed rate SEC-registered bonds priced at 2.75%. The proceeds of the new issuance were used to fund the early redemption and extinguishment of the company’s US$1.20 billion 3.75% bonds due to mature in June 2025.
- On 19 December, the company announced the Board of Directors had selected Dominic Barton to succeed Simon Thompson as the new Chair. Dominic will join the Board with effect from 4 April 2022 and be appointed to the role of Chair at the conclusion of the Rio Tinto Limited annual general meeting on 5 May 2022.
- On 21 December, Rio Tinto announced it had entered into a binding agreement to acquire the Rincon lithium project in Argentina from Rincon Mining for US$825 million. Rincon is one of the largest undeveloped lithium brine projects in the world, located in the heart of the lithium triangle in Salta Province.
- The guidance assumes development of the pandemic does not lead to government-imposed restrictions and widespread protracted cases related to new highly contagious variants with high severity, which could result in a significant number of our production critical workforce and contractor base being unable to work due to illness and/or isolation requirements. This risk extends to prolonged interruption of service from a key partner or supplier which could lead to severely constrained operational activity of a key asset or project. This risk is exacerbated globally by tight labour markets and supply chain delays.
Read the article online at: https://www.globalminingreview.com/finance-business/20012022/rio-tinto-releases-4q21-production-results/
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