Rio Tinto releases fourth quarter production results

Rhea-AI Summary

In 2021, Rio Tinto faced significant challenges due to ongoing COVID-19 disruptions yet managed strong product demand. Highlights include the acquisition of the Rincon lithium project in Argentina for $825 million and a commitment to decarbonizing its operations. Full-year Pilbara iron ore production was 319.7 million tonnes, down 4% from 2020, with fourth-quarter shipments at 84.1 million tonnes, a 5% decrease year-over-year. The company recorded significant labor and equipment challenges that affected production across several segments but achieved zero fatalities in its managed operations.

Positive

• Acquisition of Rincon lithium project for $825 million enhances portfolio.
• Commitment to decarbonization with new partnerships and initiatives.
• Initiated Rio Tinto Safe Production System showing initial positive outcomes.

Negative

• Pilbara iron ore production down 4% compared to 2020.
• Various production segments, including bauxite and aluminum, reported decreases.
• Delays in Jadar lithium project development pushed first production to 2027.

MELBOURNE, Australia--(BUSINESS WIRE)-- Rio Tinto Chief Executive Jakob Stausholm said: “In 2021 we continued to experience strong demand for our products while operating conditions remained challenging, including due to prolonged COVID-19 disruptions. Despite this, we progressed a number of our projects, including the Pilbara replacement mines, underlining the resilience of the business and the commitment and flexibility of our people, communities and host governments. We are seeing some initial positive results from the implementation of the Rio Tinto Safe Production System, which we will significantly ramp up in 2022, as we continue to work hard to improve our operational performance to become the best operator.

“In the fourth quarter we set a new direction for the company and announced a number of partnerships focused on decarbonising the value chain for our products, including green steel. We also entered into a binding agreement to acquire the Rincon lithium project in Argentina, which is strongly aligned with our strategy. These actions will ensure we continue to deliver attractive returns to shareholders, invest in sustaining and growing our portfolio, and progress our ambition to net-zero carbon emissions."

Production*	Quarter 4 2021	vs Q4 2020	vs Q3 2021	Full Year 2021	vs FY 2020
Pilbara iron ore shipments (100% basis) (Mt)	84.1	-5%	+1%	321.6	-3%
Pilbara iron ore production (100% basis) (Mt)	84.1	-2%	+1%	319.7	-4%
Bauxite (Mt)	13.1	-2%	-6%	54.3	-3%
Aluminium (kt)	757	-7%	-2%	3,151	-1%
Mined Copper (kt)	132	0%	+6%	494	-7%
Titanium dioxide slag (kt)	228	-16%	+9%	1,014	-9%
IOC iron ore pellets & concentrate (Mt)	2.5	-9%	+15%	9.7	-6%

*Rio Tinto share unless otherwise stated

2021 operational highlights and other key announcements

• The safety and well-being of our employees and contractors remains our priority. Fatigue, labour shortages and other pressures from COVID-19 have heightened the safety risk in day-to-day operations and remind us that there is no room for complacency. We experienced our third consecutive year with no fatalities at our managed operations. We are working hard with our partners to achieve the same results at our non-managed assets and marine operations.

• Pilbara iron ore production of 319.7 million tonnes (100% basis) was 4% lower than 2020. This is due to above average rainfall in the first half of the year, cultural heritage management and delays in growth and brownfield mine replacement tie-in projects. Pilbara shipments in 2021 were 321.6 million tonnes (100% basis), 3% lower than 2020, and included elevated levels of SP10 product as a result of delays in growth and brownfield mine replacement tie-in projects.

• Bauxite production of 54.3 million tonnes was 3% lower than 2020 due to severe wet weather in the first quarter impacting system stability throughout the year, equipment reliability issues and overruns on planned shutdowns at our Pacific operations.

• Aluminium production of 3.2 million tonnes was 1% lower than 2020 due to reduced capacity at our Kitimat smelter in British Columbia following the strike which commenced in July 2021. The labour union and employees have reached an agreement with controlled restart in 2022.

• Mined copper production of 494 thousand tonnes was 7% lower than 2020 due to lower recoveries and throughput at Escondida as a result of the prolonged impact of COVID-19, partly offset by higher recoveries and grades at Oyu Tolgoi in Mongolia and Kennecott in the US.

• Titanium dioxide slag production of 1,014 thousand tonnes was 9% lower than 2020 as a result of community disruptions and subsequent curtailment of operations at Richards Bay Minerals (RBM) coupled with unplanned maintenance and equipment reliability issues at Rio Tinto Fer et Titane (RTFT) in Canada. On 24 August, RBM resumed operations following stabilisation of the security situation, supported by the national and provincial government, as well as substantive engagement with host communities and their traditional authorities.

• Production of pellets and concentrate at Iron Ore Company of Canada (IOC) was 6% lower than 2020 due to prolonged labour and equipment availability issues impacting product feed and various other operational challenges throughout the year.

• At the Jadar lithium-borate project in Serbia, as a result of delays in the approval of the Exploitation Field Licence (EFL), which is a prerequisite to publish the Environmental Impact Assessment (EIA) and commence the consultation process, we are revising development timelines. Based on current estimates and subject to receiving all relevant approvals, permits and licences, first saleable production is expected to be no earlier than 2027 (previously 2026).

• In the fourth quarter, we entered into several partnerships to accelerate decarbonising our own business and the value chains we operate in. In November, we announced the ELYSIS joint venture successfully produced aluminium without any direct greenhouse gas emissions from commercial-size cells.

• On 20 October, we outlined the actions being taken to strengthen the business and improve performance. We unveiled a longer-term strategy to ensure we thrive in a decarbonising world and continue to deliver attractive shareholder returns, in line with our policy.

• This year, we initiated the Rio Tinto Safe Production System (RTSPS) at five pilot sites, focusing on sustainably unlocking capacity across the system. We are already seeing returns in the first year of rollout including a significant improvement at the Kennecott concentrator since the July deployment compared to the previous 12 months performance. A significantly larger programme is planned for 2022, subject to COVID-19 constraints, with the RTSPS rollout of up to 30 deployments at 15 sites as well as up to 80 rapid improvement projects which aim at improving targeted bottlenecks.

• On 28 October, we issued $1.25 billion 30-year fixed rate SEC-registered bonds priced at 2.75%. The proceeds of the new issuance were used to fund the early redemption and extinguishment of the company’s $1.20 billion 3.75% bonds due to mature in June 2025.

• On 19 December, we announced the Board of Directors had selected Dominic Barton to succeed Simon Thompson as the new Chair. Dominic will join the Board with effect from 4 April 2022 and be appointed to the role of Chair at the conclusion of the Rio Tinto Limited annual general meeting on 5 May 2022.

• On 21 December, we announced we had entered into a binding agreement to acquire the Rincon lithium project in Argentina from Rincon Mining for $825 million. Rincon is one of the largest undeveloped lithium brine projects in the world, located in the heart of the lithium triangle in Salta Province.

• Our guidance assumes development of the pandemic does not lead to government-imposed restrictions and widespread protracted cases related to new highly contagious variants with high severity, which could result in a significant number of our production critical workforce and contractor base being unable to work due to illness and/or isolation requirements. This risk extends to prolonged interruption of service from a key partner or supplier which could lead to severely constrained operational activity of a key asset or project. This risk is exacerbated globally by tight labour markets and supply chain delays.

• All figures in this report are unaudited. All currency figures in this report are US dollars, and comments refer to Rio Tinto’s share of production, unless otherwise stated.

The full fourth quarter production results are available here

This announcement is authorised for release to the market by Steve Allen, Rio Tinto’s Group Company Secretary.

riotinto.com

LEI: 213800YOEO5OQ72G2R82
Classification: 3.1 Additional regulated information required to be disclosed under the laws of a Member State

Category: General

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FAQ

What were Rio Tinto's Q4 production results for 2021?

In Q4 2021, Rio Tinto reported Pilbara iron ore shipments of 84.1 million tonnes, a decrease of 5% compared to Q4 2020.

How did COVID-19 affect Rio Tinto's operations in 2021?

COVID-19 disruptions led to operational challenges and reduced production across multiple segments, including lower iron ore and bauxite output.

What is the significance of the Rincon lithium project acquisition?

The $825 million acquisition of the Rincon lithium project aligns with Rio Tinto's strategy to expand its lithium portfolio amidst rising demand for battery materials.

When is the expected first saleable production for the Jadar lithium project?

First saleable production from the Jadar lithium project is now expected no earlier than 2027 due to delays in obtaining necessary approvals.

What safety achievements did Rio Tinto report for 2021?

Rio Tinto achieved zero fatalities at its managed operations in 2021, despite heightened safety risks due to COVID-19.