Rio Tinto Q1 bauxite production update

2018-04-20

Apr. 19, 2018 - Rio Tinto announced that bauxite production of 12.7 million tonnes was 12% higher than the first quarter of 2017, primarily driven by operational improvements. Gove production was notably 31 % higher due to the debottlenecking of the materials handling system, whilst stronger production was also achieved at Weipa and Sangaredi. Production was lower than the fourth quarter of 2017 due to seasonal wet weather.

8.2 million tonnes was shipped to third parties in the first quarter of 2018, 19 per cent higher than the first quarter of 2017 due to firm demand and higher port availability.

Amrun
The Amrun project is advancing to plan and has completed the installation of beneficiation modules and the process water dam. The project remains on schedule for first shipment in the first half of 2019.

Alumina
Alumina production for the quarter was three per cent lower than the corresponding period in 2017 due primarily to maintenance at QAL.

Aluminium
Quarterly aluminium production was five per cent lower than the corresponding period last year. This was due largely to an ongoing lock-out at the Becancour smelter, which began on 11 January 2018, as well as a power incident at the Dunkerque smelter which occurred on 6 February 2018.

On 10 January 2018, Rio Tinto announced it had received a binding offer for the sale of the Aluminium Dunkerque smelter in France for USD 500 million, subject to final adjustments. The sale is expected to complete in the second quarter of 2018, subject to satisfactory consultations with key stakeholders and completion of other conditions.

On 26 February 2018, Rio Tinto announced it had received a binding offer of USD 345 million for the sale of its ISAL smelter in Iceland, its 53.3 % share in the Aluchemie anode plant in the Netherlands and its 50 % share in the Aluminium fluoride plant in Sweden. The sale is expected to complete in the second quarter of 2018, subject to satisfactory consultations with key stakeholders and completion of other conditions.

Following the announcement by the United States Treasury Department on 6 April, 2018, that it was implementing sanctions on various Russian individuals and companies, Rio Tinto announced on 13 April 2018 that it has reviewed arrangements it has with impacted entities. The arrangements include Rusal’s 20 % interest in Queensland Alumina Limited in Australia, including Rusal’s associated supply and offtake arrangements, bauxite sales to Rusal’s refinery in Ireland and offtake contracts for alumina that are used at Rio Tinto’s smelters, mainly in France and Iceland.

As a result of the imposition of these sanctions, Rio Tinto is in the process of declaring force majeure on certain contracts and is working with its customers to minimise any disruption in supplies.

2018 guidance
Rio Tinto’s share of production in 2018 is expected to be between 49 and 51 million tonnes of bauxite and 8.0 to 8.2 million tonnes of alumina. Aluminium guidance of 3.5 to 3.7 million tonnes will be adjusted following completion of the sale of the Aluminium Dunkerque and ISAL smelters. Adjustments may also be made as a consequence of the US sanctions.