Rio Tinto has released H1 2019 results. Though aluminium business suffered due to lower aluminium prices, it was stable from an operational perspective. Bauxite and alumina section performed better in comparison to primary metal.
Bauxite volumes rose following the completion of Amrun with third party sales up 8%. There was some respite on cost inflation for certain raw materials like caustic soda and petroleum coke. Bauxite production of 26.2 million tonnes was 1% higher than 2018 first half. Production at managed operations increased 3%, with the ramp-up of Amrun project progressing in time. This was partly offset by lower production from the non-managed Porto Trombetas (MRN) JV in Brazil.
{alcircleadd}
Shipments of bauxite to third parties increased by 8% to 18.3 million tonnes, reinforcing Rio Tinto’s position as a leading global supplier in the seaborne bauxite trade.
Alumina production of 3.8 million tonnes was 3% lower than 2018 first half due primarily to production disruptions following major maintenance work at QAL and the lower bauxite supply from MRN impacting production at Vaudreuil refinery.
From the financial side, gross revenue for bauxite and alumina stood at US$ 2,212 million, slightly down from US$ 2,365 million in H1 2018. Underlying EBITDA stood at US$ 931 million, up 5.3% from US$ 884 million in H1 2018.
Rio Tinto reported a balanced result in alumina. However, 2.2 million tonnes of its legacy alumina sales contracts suffered as they are exposed to a fixed linkage to the LME price. These contracts would expire between 2023 and 2030. The negative impact on EBITDA of these legacy contracts was $0.15 billion in 2019 first half.
The Amrun bauxite mine on the Cape York Peninsula in north Queensland continues to ramp up and is expected to reach its full capacity production rate of 22.8 mtpy from 2019. The $0.7 billion expansion of the Sangaredi bauxite mine in Guinea is now complete, increasing the annual capacity of Compagnie des Bauxites de Guinée (CBG) to 18.5 million tonnes.
Rio expects its total bauxite production in 2019 to be between 56 and 59 million tonnes and alumina production to be between 8.1 and 8.4 million tonnes.
Responses
