Rio Tinto's bauxite output slows down in H1 2023 due to equipment downtime; Target is to produce 54-57 MT at the year-end

Rio Tinto announced its operational and financial results for the first half of 2023 ended June 30, revealing the bauxite and alumina production standing at 25.6 million tonnes and 3.7 million tonnes, respectively. On a year-on-year basis, Rio’s bauxite output edged an 8 per cent downfall as Weipa operations were affected by higher-than-average rainfall during the wet season, resulting in reduced pit access and longer haul distances. Production was further impacted by equipment downtime at both Weipa and Gove.

The company’s alumina production, on the other hand, was relatively less affected as there was an ongoing improvement in operational stability at Yarwun and Vaudreuil refineries; however, offset by unplanned plant downtime at Queensland Alumina Limited (QAL).

By the end of 2023, Rio aims to churn out 54 to 57 million tonnes of bauxite and 7.4 to 7.7 million tonnes of alumina.

Rio Tinto also reported that it shipped 17 million tonnes of bauxite to third parties, generating segmental revenue of $1.1 billion.

Rio Tinto’s aluminium production in H1 2023 stood at 1.6 million tonnes, up by 9 per cent from the same period last year, benefitted from the continued ramp-up of the Kitimat smelter. The company is also expanding AP60 aluminium smelter in Quebec, with an investment of $1.1 billion. The aim is to produce 3.3 million tonnes to 3.7 million tonnes of aluminium at the year-end.

Recently, Rio Tinto also entered into forming a joint venture with the Giampaolo Group’s Matalco to manufacture and market recycled aluminium products as it is committed to meeting the increasing demand for low-carbon aluminium. As per the report, Rio Tinto is investing $0.7 billion for the project.

From the upstream aluminium business, Rio Tinto generated $6.3 billion revenue, down by 20 per cent from $7.8 billion during the corresponding period of the previous year. As a group of companies, Rio Tinto earned consolidated sales revenue of $26.7 billion, with net cash generated from operating activities at $7 billion.

Rio Tinto’s net profit in H1 2023 was $5.1 billion, down by 43 per cent from $8.9 billion.Net debt stood at $4.4 billion compared to $4.2 billion a year ago.

Rio Tinto’s Chief Executive, Jakob Stausholm, said: "Our robust financials, despite softer market conditions, are driven by the quality of our assets and our great people, delivering underlying EBITDA of $11.7 billion, free cash flow of $3.8 billion and underlying earnings of $5.7 billion, after taxes and government royalties of $4.1 billion. Our balance sheet strength enables us to continue to invest with discipline while also paying an interim ordinary dividend of $2.9 billion, a 50% payout, in line with our practice.”

He added, “We will continue paying attractive dividends and investing in the long-term strength of our business as we sustain and grow our portfolio, while contributing to society's drive to net zero."