Rio Tinto's Al, alumina output falls in 1Q

UK-Australian resources firm Rio Tinto produced less aluminium in January-March compared to both a year and a quarter earlier, but expects increased smelter capacity to keep it on track to meet 2022 guidance.

First-quarter output was 736,000t, lower by 8pc on the year and by 3pc on the quarter. The fall in output was largely the result of a labour strike at the Kitimat smelter in British Columbia, Canada, the firm said in its quarterly production report.

Stable performance at other smelters and the ramp-up of Kitimat to full production through this year means the company is likely to meet its 2022 guidance of 3.1mn-3.2mn t. Output totalled 3.2mn t in 2021.

London Metal Exchange aluminium for three-month delivery hit a record high of $3,967/t on 7 March on the prospect of reduced availability of Russian supply because of the Russia-Ukraine conflict. Prices fell back to $3,325/t on 19 April, still sharply higher than a 12-month low of $2,330/t on 20 April last year. First-quarter aluminium prices were supported by tight physical markets and low inventory levels, Rio said.

The company's first-quarter bauxite output was flat on the year at 13.6mn t, with a similar level of wet weather disruptions as in the previous period. Output was 4pc higher on the quarter. Bauxite shipments to third-party customers rather than Rio Tinto's own alumina refineries totalled 10.1mn t, 12pc higher on the year and 13pc up on the quarter thanks to fewer direct shipping interruptions stemming from Covid-19 impacts and weather events. Production guidance for 2022 is 54mn-57mn t, compared to output of 54mn t in 2021.

Alumina output was 1.9mn t in January-March, 7pc lower on the year and 1pc down on the quarter. The fall was mainly the result if unplanned refinery outages.

Rio has taken full ownership of the 3.8mn t/yr capacity Queensland Alumina joint venture in Australia, after the Australian government imposed sanctions on Russia. The project was previously 20pc owned by Russian firm Rusal. Rio's full-year guidance for alumina operations is 8mn-8.4mn t, compared to output of 7.9mn t in 2021.

The company's titanium slag output totalled 273,000t in January-March, 2pc lower on the year. But this was 20pc higher on the quarter because of the restart of operations at Richards Bay Minerals in South Africa after a long security-related suspension, as well as improved stability at Rio Tinto Fer et Titane in Canada. Full-year titanium slag guidance is 1.1mn-1.4mn t compared to output of 1mn t in 2021.

By Angus Macmillan