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Rio Tinto reports iron ore production in 1Q17

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Dry Bulk,

Rio Tinto has reported production results for its Pilbara iron ore operations for 1Q17.

Rio Tinto Chief Executive J-S Jacques said: “Despite challenging weather conditions at our West Australian and Queensland operations, we delivered solid production in the first quarter of 2017. Our strategy is unchanged. Our number one priority is safety. We maintain our disciplined approach to capital management and maximising cash flow, with a focus on managing costs and enhancing productivity across the business. These actions support the delivery of strong cash returns to shareholders in the short, medium and long term.”

Pilbara operations produced 77.2 million t (Rio Tinto share 63.6 million t) in 1Q17, 3% lower than the same quarter of 2016. The company reported sales of 76.7 million t (Rio Tinto share 63.2 million t) were in line with the same period of last year.

Production and sales were both impacted by significant weather disruptions, which resulted in heavy flooding across several sites including the rail network, along with the suspension of ship loading on a number of occasions. All operations across the mine and infrastructure network have now recovered and are operating to plan.

Approximately 20%of sales in the quarter were priced with reference to the prior quarter’s average index lagged by one month. The remainder was sold either on current quarter average, current month average or on the spot market.

Approximately 62% of sales in the quarter were made on a cost and freight (CFR) basis, with the remainder sold free on board (FOB).

Pilbara projects

The Silvergrass project incrementally increases the Nammuldi operation by 10 million tpy, delivering high-grade, low-phosphorus ore into the Pilbara Blend. First ore is on target for 2H17.

According to Rio Tinot, the AutoHaul® project is advancing well with commencement and ramp up of trains operating in automated mode. Drivers are remaining on board until all safety and reliability systems are thoroughly demonstrated.

Looking forward

Rio Tinto’s expected Pilbara shipments in 2017 remains at between 330 – 340 million t (100% basis).

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