RIO Rio Tinto Limited

   By Rhiannon Hoyle 
 

SYDNEY--Rio Tinto PLC (RIO.LN) recorded a sharp rise in half-year iron ore exports by ramping up one mine and working others harder, and said it expects shipments to hit the high end of its target range for 2018.

The Anglo-Australian mining company, one of the world's top iron-ore sellers, said it shipped 168.8 million metric tons of the steelmaking commodity from its Australian mines in the first half of 2018, up 9% on a year ago. It also expects annual shipments to be around the upper end of an existing target of 330 million-340 million tons.

Rio Tinto has been expanding its iron ore operations in Australia's remote Pilbara mining region and is pressing ahead with a multiyear campaign to make the business more efficient.

It said higher shipments during the half reflected deepening productivity improvements across its network of mines, rail and port facilities and rising output from its new Silvergrass pit. Better weather conditions versus a year ago also helped shipments flow smoothly.

The miner reported record sales of lump iron ore during its fiscal second quarter, as it sought to benefit from elevated prices for high-quality ore. Demand for high-grade lump has surged following a shift in China's more-profitable steel sector toward bigger, greener mills, which run better on premium ore.

Rio Tinto said production of Pilbara Blend Lump, one of its top-selling products, was up 9% in the first half.

"Our increasingly flexible Pilbara iron ore system continued to perform well," said Chief Executive Jean-Sebastien Jacques.

He said the miner continues to face pressures from rising costs. While stronger global growth is helping miners emerge from a multiyear downturn, the sector faces a fresh cost crunch as prices for fuel, wages and chemicals begin to climb.

Rio Tinto said cost pressures were particularly acute in its aluminum business. The miner on Tuesday said first-half aluminum output fell by 4% to 1.7 million tons.

Half-year production of other commodities was mostly higher. Mined copper output jumped 42% owing to strong production at the part-owned Escondida mine in Chile, which was disrupted by a worker strike in the same period of last year.

Hard coking coal production was up 4%. Output from that business early last year had been hampered by a cyclone in Australia.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

(END) Dow Jones Newswires

July 16, 2018 19:40 ET (23:40 GMT)

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