Rio Tinto thermal coal production falls
Rio Tinto’s thermal coal production fell by 16% on the quarter and 9% y/y as wet weather hit output at the Hunter Valley Operations in New South Wales. The fall also reflects the changed ownership structure at its Coal & Allied operations, as well as the sale of its stake in the Bengalla joint venture. Last year, Bengalla produced 2.662 million t of thermal coal for Rio Tinto.
On 3 February, Rio Tinto took full ownership of Coal & Allied from its partner, Mitsubishi. Coal & Allied includes the three opencast operations at Hunter Valley Operations and Mount Thorley Warkworth.
At the same time, Mitsubishi took a direct 32.4% stake in Hunter Valley Operations bringing Rio Tinto’s interest in New South Wales coal to 67.6% at Hunter Valley, 80% at Mount Thorley and 55.57% at Warkworth.
The change of ownership structure, combined with adverse weather, saw Rio Tinto’s share of Hunter Valley Operations production fall to 1.36 million t in 1Q16 from 2.18 million t in 1Q15 and 2.35 million t in 4Q15. Last year, Rio Tinto’s share of Hunter Valley Coal production stood at 8.04 million t of total thermal coal production of 18.64 million t.
Rio Tinto produces thermal coal from the Coal & Allied mines, as well as the Hail Creek and Kestral mines in Queensland.
The company also completed the sale its 40% stake in the Bengalla joint venture for AUS$616.7 million on 1 March and announced an agreement to sell its Mount Pleasant thermal coal assets to MACH Energy Australia for AUS$224 million plus royalties on 27 January. That agreement is expected to close this year.
Looking ahead, Rio Tinto’s share of production is unchanged and is expected to be 16 – 17 million t of thermal coal.
Edited by Jonathan Rowland.