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Rio Tinto announced that its second quarter bauxite production of 13.4 million tonnes was 1% higher than the same period of 2018. Production at managed operations increased by 2%, with the ramp-up of Amrun progressing despite weather related impacts in the first quarter. This was partly offset by lower production from the non- managed Porto Trombetas JV in Brazil. The expansion project at CBG, a non managed JV in Guinea, experienced a slower than expected ramp-up, but is now delivering at target run-rates. 9.5 million tonnes of bauxite were shipped to third parties in the second quarter, 8% higher than the same period of 2018.
Alumina - Alumina production in the second quarter of 2019 was 6% lower than the same period in 2018 due primarily to major maintenance activities at non-managed QAL and the lower bauxite supply from MRN impacting production at Vaudreuil.
Aluminium - Aluminium production of 0.8 million tonnes in the second quarter was in line with the corresponding period of 2018. Excluding the non-managed Becancour operation, where a lock-out constrained operations, aluminium production in the first half was 1% higher than the corresponding period in 2018, reflecting continued productivity improvement.
On 2 July 2019, management and unions at the Becancour smelter agreed a new labour arrangement which will lead to restart of production at the end of July, with full ramp-up expected by mid-2020.
Average realised aluminium prices in the first half of 2019 were USD 2,174 per tonne (H1 2018: USD 2,547 per tonne). This includes premiums for value-added products which represented 54% of primary metal sold in the first half of 2018 (H1 2018: 58%) and generated attractive product premiums averaging USD 242 per tonne of VAP sold (H1 2018: USD 222 per tonne) on top of the physical market premiums. The mid-west premium duty paid increased from USD 396 per tonne in the first half of 2018 to $420 per tonne in the first half of 2019. A 10% tariff on aluminium imports into the United States under Section 232, which was effective for Canadian imports, was paid until the tariffs were removed on 19 May 2019.
There was some respite from cost inflation in Aluminium compared with 2018 for certain raw materials, in particular for caustic soda and petroleum coke albeit with a lag effect due to the pricing mechanism. However, this was partly offset by inflationary pressures on other costs.
Kemano - At the Kemano hydro-power facility at Kitimat, British Columbia, the tunnel boring machine has achieved a total of 828 metres excavated as at 30 June 2019. Current progress is slightly behind schedule, but cost forecasts remain on budget.
2019 guidance - 2019 guidance is unchanged. Rio Tinto’s expected share of bauxite production in 2019 is between 56 and 59 million tonnes. Aluminium production guidance is between 3.2 and 3.4 million tonnes and alumina production guidance is 8.1 to 8.4 million tonnes.