Rio Tinto’s Aluminium Output Off by One Percent in 2017
17 January 2018 by Staff
Anglo-Australian mining giant Rio Tinto Group released production results for the fourth quarter of 2017 yesterday. Though bauxite production was up markedly, the rise did not lead to a corresponding increase in primary aluminium production, which, coupled with news of continued capacity cuts in the People’s Republic of China and increased global demand, has many market watchers optimistic for a strong 2017 for aluminium.
The fourth quarter saw Rio Tinto mine 13.8 million metric tons of bauxite ore, which was better year-on-year by 14 percent and up quarter-on-quarter by 7 percent. Rio Tinto’s total bauxite harvest for the year came to 50.8 million metric tons, which was good for a 6-percent increase over 2016’s numbers. A planned ramp-up at Gove increased the site’s production by 23 percent, and production increases at Weipa led to a 5-percent increase over last year. As a result of robust bauxite ore production, Rio Tinto shipped 32.3 million metric tons of the ore to third-party buyers in 2017, which was a 10-percent increase over 2016. The fourth quarter alone saw a year-on-year increase in shipments of 25 percent.
Alumina production in the quarter totaled 2.1 million metric tons, which was a slight falloff of 1 percent year-on-year but good for a 5-percent rise over the third quarter. For the year, Rio Tinto refined 8.1 million metric tons of alumina, which was off by 1 percent from 2016’s total. Rio Tinto credits a strong performance by the Yarwun refinery as keeping the firm’s alumina output consistent with last year’s totals.
Rio’s smelters turned out 887 thousand metric tons of primary aluminium in the fourth quarter, which was a 3-percent drop year-on-year but essentially level with the prior quarter’s total. The entire year’s total of smelted primary aluminium was 3.6 million metric tons, down 1 percent from 2016’s production. Robust results across the majority of Rio Tinto’s operations helped blunt the blow to production landed by the curtailment at Boyne smelter and the power interruption at Sohar Aluminium.
Going forward, Rio Tinto expects to mine between 49 million and 51 million metric tons of bauxite ore, refine between 8.0 million and 8.2 million metric tons of alumina, and smelt between 3.5 million and 3.7 million metric tons of aluminium in the current year. However, Rio Tinto cautions that guidance on the year’s aluminium production may change upon completion of the sale of Aluminium Dunkerque.
Rio Tinto’s brass indicate the cuts in production in the Middle Kingdom are going to continue in 2018, more than doubling cuts made in 2017. Simon Pelletier, general manager of global metal sales at Rio Tinto Aluminium, told industry media that cuts at Chinese smelters will likely total 3.6 million metric tons per annum, far exceeding 2017’s 1.5 million metric tons per annum of closures. In addition, Pelletier believes aluminium demand to increase by 4 percent per annum over the next five years.