Rio Tinto Limited (ASX: RIO), the world’s second-largest iron ore miner, shipped 336 million tonnes of the steel-making ingredient in the year ended 31 December 2015.
In an ASX announcement this morning, Rio Tinto CEO, Sam Walsh, said the miner’s operating performance in its 2015 financial year was a result of its focus on efficiency and disciplined management.
“In 2015, we delivered efficient production, meeting our targets across all of our major products, while rigorously controlling our cost base,” Mr Walsh said. “We will continue to focus on disciplined management of costs and capital to maximise cash flow generation throughout 2016.”
Over the year, Rio’s iron ore shipments were in line with guidance of 340 million tonnes, and in 2016, the company expects shipments to be around 350 million tonnes.
The group’s bauxite business saw a modest 4% rise for the year and slightly exceeded guidance of 43 million tonnes. Bauxite is a key ingredient in aluminium production. The aluminium business achieved mostly flat production, year over year.
Mined copper production fell 16% year over year, despite a 36% rise in production at the giant Oyu Tolgoi project in Mongolia. However, Rio says its copper production will improve in the year ahead.
Coal production was in line with expectations for the year, while diamonds and minerals production fell 25%.
Is it time to buy Rio Tinto shares?
Rio Tinto put in a solid operating performance throughout 2015, meeting or exceeding guidance across most commodity groups. However, the market conditions for many of Rio’s products have worsened in recent times, as oversupply meets with falling Chinese demand. The supply-demand imbalance has resulted in sharp falls in the prices of Rio’s most lucrative commodities like iron ore, copper, coal, and aluminium.
Therefore, given mining cycles usually last many, many years, I’m not a buyer of Rio Tinto shares today.