Rio Tinto’s 2016 Production Review: Iron Ore Shipments To Rise Along A Moderate Growth Trajectory Going Forward

by Trefis Team
Rio Tinto
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Rio Tinto, the world’s second largest iron ore producer, released its full year production review on January 16. The company reported a 3% year-over-year increase in iron ore shipments from its Pilbara mines in Western Australia in 2016, which is relatively modest compared to the sharp increases seen over the previous two years. [1] The increase in iron ore shipments was lower than the 6% year-over-year increase in output in 2016 from the expanded production facilities at Pilbara, which accounts for roughly 95% of the company’s overall iron ore output. [1] Demand conditions are likely to remain subdued going forward as a result of slowing Chinese economic growth and shrinking markets for Chinese steel exports due to protectionist measures instituted in the U.S. and Europe against unfair Chinese trade practices. [2] Since China accounts for the purchase of nearly two-thirds of the world’s seaborne iron ore supply, weakening steel production in the country will negatively impact the global demand for iron ore, which is a raw material for steel production. [3] Given the likelihood of tepid market conditions for iron ore in the near term, Rio Tinto’s iron ore shipments are likely to rise along a more gradual trajectory going forward than seen in recent years, as illustrated by the chart shown below.

Besides a modest increase in iron ore output, Rio Tinto also reported a sharp increase in aluminum output and a moderate increase in mined copper. The increase in aluminum output was due to higher production from the expanded Kitimat smelter in Canada whereas the mining of high grade ores at the Kennecott mine in Utah drove mined copper production higher. The following table summarizes the production figures for the major commodities produced by Rio Tinto.

Rio Tinto 2016 Production Review

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


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
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


  1. Rio Tinto Fourth Quarter Production Review, Rio Tinto Website [] []
  2. Will Elevated Levels Of Iron Ore Prices Persist In 2017?, Trefis []
  3. China on track to import 1 billion tons of iron ore this year, []
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