Rio Tinto Driverless Trains Advance, Projects on Track -- Commodity Comment

By Rhiannon Hoyle

Rio Tinto PLC, the world's second-biggest listed mining company, released its first-quarter operational report on Wednesday. The mining company reported a 5% on-year rise in quarterly shipments from its Australian iron ore mines, but weaker output of commodities including coal and aluminum. Here are some remarks from the company's report:

On Australian iron ore production:

"Production benefited from fewer weather disruptions than the first quarter of 2017, along with the ramp up of Silvergrass and the ongoing implementation of productivity improvements across the integrated system. Rail productivity continues to improve, with 85.0 million [metric tons] railed in the first quarter. Sales were 2.8 million tons below production due to disruptions at the ports resulting from tropical cyclone Marcus in March."

On its driverless trains:

"The automation of the Pilbara train system (AutoHaul) continues to advance, with approximately 65% of trains at the end of the quarter in autonomous mode with a driver on board for supervision and more than three million kilometres now completed in this mode of operation. The project continues to progress with the regulator approval process and is on schedule to be completed by the end of 2018."

On aluminum:

"Following the announcement by the U.S. Treasury Department on April 6, 2018, that it was implementing sanctions on various Russian individuals and companies, Rio Tinto announced on April 13 2018 that it has reviewed arrangements it has with impacted entities. The arrangements include Rusal's 20% interest in Queensland Alumina Ltd. 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 minimize any disruption in supplies."

On new projects:

"The major growth projects remain on track. The Silvergrass iron ore mine continues to ramp up, Amrun is on schedule for first bauxite shipment in the first half of 2019 and construction of the first drawbell at Oyu Tolgoi underground is expected in mid-2020."

On titanium dioxide operations:

"Slag production at RBM for the second quarter of 2018 will be impacted by a labor dispute between contractors and their employees, which halted both mine and smelter operations. As a result, RBM has declared a separate force majeure on deliveries to its titanium dioxide feedstock customers, which will be lifted once the operation returns to normal operating capacity. Operations at RBM were restarted on April 11 2018, and the mine is expected to return to previous operating capacity later this year."

-Write to Rhiannon Hoyle at [email protected]