The Rio Tinto Limited (ASX: RIO) share price will be one to watch this morning following the release of its fourth quarter update.
How did Rio Tinto perform in the fourth quarter?
Rio Tinto was on form in the fourth quarter and delivered production growth across most commodities.
According to the release, the company’s Pilbara iron ore production came in 3% higher for the quarter to 86Mt. This brought its full year production to 333.4Mt, which was up 2% on the prior corresponding period. This was despite negative impacts from Cyclone Damien in the first quarter and COVID-19 disruptions.
In respect to shipments, the company’s Pilbara iron ore shipments grew 2% in the fourth quarter to 88.9Mt and 1% for the full year to 330.6Mt. Management advised that this was underpinned by record total material moved, which was 7% higher than the previous record in 2019.
The mining giant’s Bauxite production of 56.1 million tonnes was 2% higher than 2019. This was supported by the ramp-up of the expansion at the CBG mine in Guinea, and steady performance at the Pacific mines.
Despite growth in the fourth quarter, Aluminium production came in flat for the year at 3.2 million tonnes. Management explained that the ramp-up of the Becancour smelter in Quebec offset lower volumes from the curtailment of Line 4 at the Tiwai Point aluminium smelter and from the Kitimat smelter pot relining campaign.
And while Rio Tinto’s copper production was 9% lower than in 2019, it was ahead of its guidance range at 527.9kt. This production decline was due to lower grades at Kennecott as a result of planned pit sequencing and Oyu Tolgoi production phasing.
Average price received update.
Rio Tinto has revealed the prices that it was able to command in 2020 for its major commodities.
Iron ore was unsurprisingly the star of the show, with the company commanding US$91 per wet metric tonne and US$98.9 per dry metric tonne. This was up 15.2% and 15.1%, respectively, over the prior corresponding period.
Also increasing in 2020 was the copper price, with Rio Tinto achieving a price of 283 US cents per pound. This was up 3.3% year on year.
Looking ahead, the company is forecasting Pilbara iron ore shipments of 325Mt to 340Mt in 2021. This compares to 2020’s shipments of 331Mt.
Mined copper production is expected to be in the range of 500kt to 550kt, Bauxite is expected to be 56Mt to 59Mt, and Aluminium is forecast to be between 3.1Mt and 3.3Mt.
Rio Tinto’s new Chief Executive, Jakob Stausholm, commented: “Safe and well-run operations, together with world-class assets and a strong balance sheet, leave Rio Tinto well placed to generate superior returns for shareholders, invest in sustaining and growing our portfolio, while continuing to pay taxes and royalties in our host communities and make a broader contribution to society, including employment and procurement.”