Rio Tinto's bauxite earnings drop in H1 2017 despite higher volume

Rio Tinto reports four per cent increase in bauxite production in the first half of 2017 at 24.2 million tonnes in comparison to the same period of 2016. The increase was driven by record production at both Gove and Weipa bauxite mines.

Underlying earnings declined by 12 per cent to $215 million in H1 2017 first half. This was attributed to the impacts of the stronger Australian dollar and slightly lower prices slightly offset by higher volumes and continued focus on cash cost reductions.

Rio reports gross sales revenues of $957 million for bauxite in H1 2017. The revenue remains flat YoY and included freight revenues of $111 million in comparison $96 million in H1 2016.

Rio’s $1.9 billion Amrun bauxite project on the Cape York Peninsula in north Queensland is developing according to plan in both engineering and construction.  A number of construction contracts have been awarded and the key construction activities have started. The fabrication of the process plant is progressing in time and the project expects to make the first shipment in the first half of 2019.

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The $0.7 billion bauxite project would expand the production capacity of the Compagnie des Bauxites de Guinée (CBG) to 18.5 million tonnes per year. The project fulfilled all approval conditions for execution in November 2016. The expansion project expects to make the first shipment in October 2018. The expansion is currently in the execution phase.  

Rio Tinto projects 48 to 50 million tonnes of bauxite production for the full year 2017.