Rio Tinto’s Q2 2016 Production Review: Ramp Up Of Iron Ore Production Continues In Subdued Iron Ore Pricing Environment

+16.65%
Upside
63.74
Market
74.35
Trefis
RIO: Rio Tinto logo
RIO
Rio Tinto

Rio Tinto continues to ramp up its iron ore production, with the company reporting an 8% year-over-year increase in production from its Pilbara iron ore operations in Western Australia in Q2 2016. [1] The company remains on track to meet its global iron ore production guidance of 350 million tons, which would represent a 7% year-over-year increase. Rio Tinto has gone ahead with ramping up its iron ore production despite the sharp decline in iron ore prices over the past couple of years, betting on its low cost iron ore production displacing higher cost iron ore supply. Though oversupplied markets and weak iron ore prices have eroded the profits of iron ore mining companies, lower cost producers have managed to displace production from higher cost miners. Chinese iron ore imports rose around 9% year-over-year in the first half of 2016, with cheaper imported ore replacing high cost domestic iron ore production, which continues to drive the business of iron ore mining giants such as Rio Tinto. [2] In addition to higher iron ore production, Rio Tinto also reported 11% and 5% higher aluminum and mined copper production respectively on a year-over-year basis, due to expanded production facilities. The following is a summary of Rio Tinto’s Q2 2016 production.

RIO Q2 2016 Production Review

Check out our forecasts for Rio Tinto’s iron ore shipments

Have more questions about Rio Tinto? See the links below.

Relevant Articles
  1. Is Rio Tinto Stock Attractive At $62
  2. Down 9% This Year, What’s Next For Rio Tinto Stock?
  3. After Tough 2022 Results, What’s Next For Rio Stock?
  4. Is Rio Tinto Stock Still Good Value Following The Recent Iron Ore Rally?
  5. With Iron Ore Prices Under Pressure, What’s Next For Rio Stock?
  6. With Iron Ore Prices Volatile, Is Rio Tinto Stock Worth A Look?

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Rio Tinto
Notes:
  1. Rio Tinto Q2 2016 Production Review, Rio Tinto Website []
  2. Rio Tinto keeps iron ore mines running at full steam, Reuters []