The world’s second-largest iron ore miner reported record iron ore shipments in Q4 2017.
Rio Tinto (ASX:RIO,LSE:RIO,NYSE:RIO) said on Monday (January 15) that iron ore shipments from its Pilbara assets came in at 90 million tonnes during the period, up 3 percent from the year-ago quarter.
Meanwhile, iron ore shipments for the full 2017 year totaled 330.1 million tonnes, a 1-percent increase from 2016. Rio said it received an average price of almost $65 per tonne for its iron ore in 2017. Iron ore is currently trading at $76.50 per tonne.
“We shipped 90 million tonnes of iron ore from our world-class Pilbara assets, a record quarter which demonstrates the system’s growing flexibility,” said Rio Chief Executive Jean-Sebastien Jacques. The firm’s Pilbara assets are located in Western Australia.
The company’s record quarter was attributed to “ongoing productivity improvements” to its rail network, which is used for shipping iron ore from its mines to port. Rio plans to introduce autonomous trains by the end of 2018 to make the process even more efficient. In addition, its Silvergrass iron ore mine was commissioned in the fourth quarter of 2017, and will continue to ramp up in 2018.
The company cut its annual iron ore guidance in the middle of 2017, reducing it slightly to 330 million tonnes based on rail maintenance work that slowed haulage. Jacques said Rio finished the year “in line with guidance across all major products.” For the entire year, it produced 3.6 million tonnes of aluminum and 478,100 tonnes of copper; it dealt with a strike at its Escondida mine in Q1 2017.
Rio’s results are likely to increase investor expectations for strong cash returns, according to the Financial Times.
Jacques added that “in 2017 we announced over $8 billion of cash returns to shareholders and continued to reshape the portfolio. Our focus on value over volume and mine-to-market productivity, along with disciplined allocation of cash, will ensure that we continue to deliver superior shareholder returns in the short, medium and the long term.”
The company also received a binding offer for the sale of sale of its Aluminium Dunkerque smelter in France for $500 million earlier this year. Rio expects to complete the sale in the second quarter of 2018.
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Securities Disclosure: I, Melissa Shaw, hold no direct investment interest in any company mentioned in this article.