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Rio Tinto Q2 Iron Ore Shipments Up 14%

Australian mining giant Rio Tinto Plc (RTNTF,RIO,RIO.L, RTPPF) reported Pilbara iron ore shipments of 88.5 million tonnes, 100 per cent basis, in the second quarter were 14 per cent higher than the second quarter of 2017, benefiting from better weather and reflecting improved productivity across the system.

Rio Tinto's Pilbara shipments in 2018 are expected to be at the upper end of the existing guidance range of 330 million tonnes to 340 million tonnes, 100 per cent basis.

Second quarter production of 85.5 million tonnes (Rio Tinto share 71.5 million tonnes) was seven per cent higher than the second quarter of 2017, reflecting favourable weather conditions compared to last year, the ramp-up of Silvergrass and the ongoing implementation of productivity improvements across the integrated system.

Quarterly Bauxite production of 13.3 million tonnes was three per cent higher than the corresponding quarter of 2017, due to continued operational improvements. Third party shipments increased by ten per cent to 8.7 million tonnes due to firm demand.

Aluminium production of 0.9 million tonnes was three per cent lower than the second quarter of 2017 due primarily to labour disruptions at the non-managed Becancour smelter in Canada and a power interruption at the Dunkerque smelter in France.

At Argyle, carat production was eight per cent higher than the second quarter of 2017 due to an increase in tonnes processed following improved plant availability.

Mined copper production of 156.8 thousand tonnes was 26 per cent higher than the corresponding quarter of 2017, reflecting strong production at Escondida following a labour union strike in the first half of last year.

Hard coking coal production was 40 per cent higher than the corresponding quarter of 2017 due primarily to the impact of Cyclone Debbie last year.

Production at Iron Ore Company of Canada was significantly impacted in the second quarter, where operations were suspended while a new labour agreement was reached. Operations returned to normal production rates by the end of June 2018.

The major growth projects remain on track, with first bauxite shipment from Amrun expected in the first half of 2019 and construction of the first drawbell at Oyu Tolgoi Underground anticipated in mid-2020.

Divestments announced in the first half of 2018 totalling $5.0 billion pre-tax, subject to completion conditions, are all expected to complete by the end of 2018, including the Dunkerque and ISAL smelter sales and the Group's coking coal assets.

Rio Tinto's expected share of production in 2018 remains unchanged at between 49 and 51 million tones of bauxite and 8.0 to 8.2 million tonnes of alumina. Aluminium guidance of 3.5 to 3.7 million tonnes will be adjusted following completion of the sale of the Aluminium Dunkerque and ISAL smelters.

Rio Tinto's expected share of mined copper production for 2018 is unchanged at between 510 and 610 thousand tonnes. Refined copper production is expected to be between 225 to 265 thousand tonnes.

Diamond production guidance for 2018 is between 17 and 20 million carats.

Coal production guidance remains at 7.5 to 8.5 million tonnes of hard coking coal and 3.8 to 4.5 million tonnes of thermal coal. This assumes continued ownership of the coal assets until the end of 2018, and will be adjusted following completion of the asset disposals.

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