Mark Latham Commodity Equity Intelligence Service

Wednesday 17 July 2024
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Rio Tinto and Aluminium

On July 16, 2024, Rio Tinto announced its second-quarter production results, indicating growth in its aluminium and bauxite operations. According to Rio's quarterly report, aluminium production in Q2 stood at 824,000 tonnes, experiencing a 1 per cent growth Y-o-Y, owing to stable performance at all its smelters during the period.

The steady sequential growth in Q2 aluminium production led to a 3 per cent rise in Rio's total aluminium output in six months, reaching 1.65 million tonnes.

In Q2, ended June 30, Rio Tinto announced that its New Zealand Aluminium Smelters (NZAS) secured a 20-year power contract for the Tiwai Point Aluminium Smelter to enable it to continue producing high-purity, low-carbon metal, backed by renewable electricity. This arrangement is expected to further boost Rio Tinto's aluminium output in the future.

Rio Tinto's bauxite production also increased in the second quarter of the year, coming in at 14.7 million tonnes, up 9 per cent Y-o-Y and 10 per cent Q-o-Q. In H1, the bauxite output was 28.1 million tonnes, reflecting an increase of 10 per cent from the previous year. The growth demonstrates the implementation of the Safe Production System (SPS), especially at Weipa, where Rio Tinto achieved higher plant utilisation and feed rates. As a result, Rio Tinto expects its full-year bauxite production to reach 53 to 56 million tonnes.

However, alumina production in Q2 decreased 10 per cent Y-o-Y to stand at 1.7 million tonnes due to the continuing impacts on Gladstone operations from the breakage of the third-party-operated Queensland gas pipeline in March. Consequently, Rio Tinto reduced its full-year alumina production guidance to 7 million tonnes from 7.3 million tonnes. Rio expects its gas supply from the pipeline to return to normal by the end of 2024.

Rio Tinto also reported in its Q2 report that its all-injury frequency rate was 0.32, significantly improving from 0.37 in Q1 and 0.38 in Q2 2023.


https://www.alcircle.com/news/rio-tinto-announces-positive-h1-2024-operation-results-underlining-3-rise-in-aluminium-production-111440

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Oil and Gas

Kazakhstan to increase gas transit from Uzbekistan, Turkmenistan and Russia

Kazakhstan to increase gas transit from Uzbekistan, Turkmenistan and Russia

Kazakhstan is set to increase the transit volumes of gas from Russia, Turkmenistan, and Uzbekistan across its territory in 2024. This initiative was announced by Almassadam Satkaliyev, the Minister of Energy, during a government meeting.

Enhanced Gas Transit Capacity

Minister Satkaliyev highlighted ongoing efforts to fully utilize Kazakhstan's gas transit potential.

"We are increasing the transit of Russian, Turkmen, and Uzbek gas through Kazakhstan in 2024,"

he stated. These efforts are aimed at boosting the country's role as a key transit hub in the region.

Russian Gas Transit to Uzbekistan

The transit of Russian gas to Uzbekistan commenced in October 2023. In the previous year, Kazakhstan transported 1.28 bn cubic meters of Russian gas to Uzbekistan. In 2024, the goal is to elevate this volume to 3.8 bn cubic meters, with plans to further expand to 11 bn cubic meters per year in the future.

Turkmen and Uzbek Gas Transit to China

Kazakhstan is also experiencing a steady increase in the transit of gas from Turkmenistan and Uzbekistan to China. This year, the transit volume is projected to reach 37.1 bn cubic meters, marking an increase of 1.5 bn cubic meters compared to the previous year.

Negotiations with Kyrgyzstan

In addition to the aforementioned increases, Kazakhstan is currently engaged in negotiations to boost the transit of Russian gas to Kyrgyzstan. This initiative is part of a broader strategy to enhance regional gas transit cooperation.

In 2023, Kazakhstan's total gas production amounted to 59.063 bn cubic meters. This production was sourced from several key fields, including:

- Tengiz: 16.009 bn cubic meters

- Karachaganak: 22.385 bn cubic meters

- Kashagan: 11.856 bn cubic meters

- Other fields: 8.813 bn cubic meters

Looking ahead to 2024, Kazakhstan plans to produce 60.456 bn cubic meters of raw natural gas.


https://daryo.uz/en/2024/07/16/kazakhstan-to-increase-gas-transit-from-uzbekistan-turkmenistan-and-russia

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African Upstream Markets Secure Major FIDs in 2024

Up to $125 billion in final investment decisions (FIDs) will be announced across the upstream oil and gas sector globally in 2024, according to research firm Wood Mackenzie. Meanwhile, market intelligence firm GlobalData states that Africa will account for the largest share of greenfield upstream projects targeting FID in 2024, as global investors seek to unlock the continent’s untapped potential.

Ubeta Gas Field – Nigeria

In June 2024, French multinational TotalEnergies and the Nigerian National Petroleum Corporation (NNPC) announced FID for the Ubeta Gas Field Development. The two will invest $550 million to develop six wells and a 11-km pipeline to transport gas for processing at existing facilities in Obite. A 5 MW solar facility and an electrified rig are being installed to reduce project costs and carbon intensity. The project will produce 350,000 cubic feet of gas and 10,000 barrels of associated liquids, once operational in 2027.

Moho Nord Field – Republic of Congo

In May 2024, TotalEnergies announced a $600-million investment to enhance exploration, production and infrastructure at the Moho Nord field offshore the Republic of Congo. The investment aims to boost production by 40,000 barrels per day (bpd), increasing the field’s output to 180,000 bpd. With Moho Nord accounting for 50% of Congo’s total oil output, the FID will contribute to the country’s efforts to increase hydrocarbon production to 500,000 bpd. TotalEnergies holds a 63.5% stake in the project, while oil and gas independent Trident Energy holds 21.5% and the National Petroleum Company of the Congo holds 15%.

Kaminho Deepwater Project – Angola

TotalEnergies, in collaboration with Malaysian national oil company (NOC) Petronas and Angolan NOC Sonangol, announced FID for the Kaminho deepwater project in May 2024. The project, located in the Cameia and Golfinho fields in the Kwanza Basin offshore Angola, is estimated to cost $6 billion. The investment will involve converting a Very Large Crude Carrier into a Floating Production Storage and Offloading (FPSO) unit connected to a subsea production network. Once operational in 2028, the project is expected to produce 70,000 bpd. The Kaminho FPSO will be TotalEnergies’ seventh in Angola and first in the Kwanza Basin.

Iseni Gas Field – Nigeria

British multinational Shell – along with partners NNPC, TotalEnergies and Eni local subsidiary Nigerian Agip Oil Company – reached FID for the Iseni gas field project in February 2024. Located in the Okpokunou Cluster within Oil Mining Lease 35 in Bayelsa State, the project will supply 100 million standard cubic feet of gas per day to the Dangote Refinery in Lagos for processing and power generation over the next ten years. The project aligns with Nigeria’s gas market expansion strategy, which seeks to enhance energy security access through gas exploration and exploitation.


https://energycapitalpower.com/african-upstream-markets-secure-major-fids-in-2024/

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Russia’s Crude Oil Exports Slip To Lowest Level Since January

Russian seaborne crude oil exports dropped in the four weeks to July 14 to the lowest levels since January, pointing to a likely improving compliance with the OPEC+ deal, vessel-tracking data monitored by Bloomberg showed on Tuesday.

The four-week average level of Russia’s crude shipments fell to around 3.11 million barrels per day (bpd) in the four weeks to July 14, down by around 180,000 bpd from the four-week average from the week prior, according to the data reported by Bloomberg’s Julian Lee.

The latest four-week average crude shipments were the lowest observed seaborne exports out of Russia since January this year.

In the past weeks, the four-week average export volumes have continuously dropped, Bloomberg’s tanker-tracking data showed.

Lower shipments at the end of June were mostly attributed to maintenance works at Russia’s ports.

Maintenance works at the busiest oil ports dragged down weekly crude oil shipments to the lowest level in over three months as the ports of Primorsk on the Baltic Sea and Kozmino in the Far East halted vessel departures for four days each in the week to June 23.

Three weeks later, it does not look like any of the ports is carrying out works at present. So the likely explanation could be Russia improving compliance with the OPEC+ cuts and raising domestic refining rates, according to Bloomberg’s Lee.

Over the past two weeks, most of the decline in Russian crude shipments came from the Western ports on the Baltic Sea and the Black Sea. Exports from the Primorsk and Ust-Luga ports on the Baltic have slumped by 30% compared to a recent high in April, while exports from the port of Novorossiysk on the Black Sea have almost halved from their recent high.

After a drop in shipments between the April high and early June, Russia’s seaborne crude exports started rising again in June, and the volumes recovered about one-third of their recent decline.

This came even as Russia’s Energy Ministry pledged earlier in June that Russia would reach its oil production quota in June after exceeding its target output under the OPEC+ deal in May.


https://oilprice.com/Latest-Energy-News/World-News/Russias-Crude-Oil-Exports-Slip-To-Lowest-Level-Since-January.html

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Why Is the Oil Industry Booming?

For all of the focus on an energy transition, the American oil industry is booming, extracting more crude than ever from the shale rock that runs beneath the ground in West Texas.

After years of losing money on horizontal drilling and hydraulic fracturing, the companies that have helped the United States become the leading global oil producer have turned a financial corner and are generating robust profits. The stocks of some oil and gas companies, such as Exxon Mobil and Diamondback Energy, are at or near record levels.

The industry’s revival after bruising losses during the Covid-19 pandemic is due largely to market forces, though Russia’s war in Ukraine has helped. U.S. oil prices have averaged around $80 a barrel since early 2021, compared with roughly $53 in the four years before that.

That the price and demand for oil have been so strong suggests that the shift to renewable energy and electric vehicles will take longer and be more bumpy than some climate activists and world leaders once hoped.


https://www.nytimes.com/2024/07/16/business/energy-environment/oil-company-profits.html

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Energy Transfer, Sunoco Announce Team Up in Permian Basin JV

Energy Transfer and Sunoco LP have entered in a joint venture agreement that combines some of their crude oil and produced water gathering assets in the Permian Basin, the companies said July 16.

The JV will operate more than 5,000 miles of crude oil and water gathering pipelines with crude oil storage capacity in excess of 11 MMbbl. The JV’s reach will extend from Colorado City, Texas, in Mitchell County, through the Midland Basin and into the heart of the Delaware Basin, Lea County, New Mexico.

Energy Transfer will operate and hold a 67.5% interest in the joint venture and Sunoco a 32.5% interest. (Source: Businesswire)

News of the comes a day after Energy Transfer completed its acquisition of WTG Midstream Holdings in a cash-and-stock trade valued at $3.18 billion.

Energy Transfer will serve as the operator of the JV and contribute its Permian crude oil and produced water gathering assets and operations to the partnership. Energy Transfer’s long-haul crude pipeline network provides transportation of crude oil out of the Permian Basin to Nederland, Houston and Cushing is excluded from the joint venture.

Sunoco, coming off its May deal to buy NuStar Energy for $7.3 billion, will contribute all of its Permian crude oil gathering assets and operations to the JV.

Energy Transfer will hold a 67.5% interest in the joint venture with Sunoco holding a 32.5% interest.

The formation of the joint venture has an effective date of July 1 and is expected to be immediately accretive to distributable cash flow per LP unit for both Energy Transfer and Sunoco.

Intrepid Partners LLC served as financial adviser to Energy Transfer’s conflicts committee, and Potter Anderson & Corroon LLP acted as Delaware counsel.

Guggenheim Securities LLC served as financial adviser to Sunoco’s special committee. Richards, Layton & Finger, P.A. acted as Delaware counsel for Sunoco’s special committee.

Vinson & Elkins LLP and Akin Gump Strauss Hauer & Feld LLP also acted as legal counsel to the partnerships on the transaction.


https://www.hartenergy.com/exclusives/energy-transfer-sunoco-announce-team-permian-basin-jv-209800

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Alternative Energy

Eramet inaugurates lithium extraction plant in Argentina

The new facility will be operated by a joint venture of which Eramet owns the majority with 50.1%, while the rest belongs to partner Tsingshan. Tsingshan is a Chinese raw materials company known for its activities in the steel and nickel markets.

While the official start of production is scheduled for November 2024, the full production ramp-up is not expected to be completed until mid-2025. Then, the plant will produce about 24,000 tonnes of battery-grade lithium carbonate equivalent per year.

In terms of investment, the partners report having spent around 870 million dollars for the first phase. They expect an EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) between $210 and $315 million, based on a long-term price assumption of between $15,000 and $20,000/t-LCE.

“With the start of our first Centenario plant, Eramet will become a key global player in the sustainable production of lithium, a critical metal for the batteries of electric vehicles,” explained Christel Bories, Group Chair and CEO, adding: “This inauguration confirms our technological and sustainable leadership across the entire lithium value chain, from exploration to extraction and processing.”

Eramet seems to be focusing on the Centenario-Ratones deposit in Argentina for the moment, and has plans underway to build another refinery there, which the company’s board had approved of directors in late 2023. A plan fell through to open a factory together with BASF in Indonesia in June, however the battery recycling plant with Suez that is being built in Dunkirk is still planned, securing access to the other side of the lithium extraction process.

eramet.com


https://www.electrive.com/2024/07/16/eramet-inaugurates-lithium-extraction-plant-in-argentina/

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Precious Metals

Gold price up over 1%, closing in on new record

Bullion is now 18% higher for the year, boosted by anticipation of Fed loosening as well as significant buying by central banks. Geopolitical tensions have also supported the metal that is traditionally seen as a safe-haven asset.

“Optimism about US interest rate cuts as more economic data supports the case for a Fed pivot is supporting gold,” Ewa Manthey, a commodities strategist at ING Bank NV, said in a Bloomberg note on Tuesday.

“Gold is poised to keep its positive momentum going amid the current global geopolitical and macroeconomic landscape, while central bank demand is expected to grow,” Manthey added.

On Monday, Fed Chair Jerome Powell said recent data had given policymakers greater confidence that inflation is heading down to the central bank’s 2% goal.

Traders have been adding bets there will be three cuts this year after Goldman Sachs said conditions were ripe for easing, with “a solid rationale” for officials to lower rates as soon as July.

Gold’s latest rally isn’t unexpected: in June, consultancy Metals Focus predicted a fresh record this year, while earlier this month Citigroup said its base case for gold in 2025 was $2,700-$3,000 an ounce.

“The uncertainty around the prolonged waiting pattern for US interest rate cuts could drive a soft third quarter for the metal before a rally gathers pace to drive gold to a fresh new high,” Nitesh Shah, commodity strategist at WisdomTree, told Reuters Tuesday.

Trump momentum

Trump’s presidential candidacy gained momentum after a failed assassination attempt over the weekend and a judge dismissed a criminal case against him.

However, a Trump presidency could have potentially positive and negative impacts on gold, according to Giovanni Staunovo, a commodity analyst at UBS Group AG. It might lead to “tax cuts, supporting a shift to equities, and eventually limiting faster rate cuts,” he warned.

On the other hand, tax cuts would impact US fiscal balances, potentially weakening the dollar’s status and pushing buyers toward safe-haven assets such as gold, Staunovo said.

(With files from Bloomberg and Reuters)


https://www.mining.com/gold-price-up-over-1-closing-in-on-new-record/

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Osisko Gold, Franco-Nevada acquire gold stream on SolGold project in Ecuador

Osisko Gold’s (NYSE) wholly-owned subsidiary Osisko Bermuda, in partnership with Franco-Nevada Barbados, a wholly-owned subsidiary of Franco-Nevada (FNV), has entered into a definitive Purchase and Sale Agreement with SolGold and certain of its wholly-owned subsidiaries with reference to gold production from SolGold’s 100%-owned Cascabel copper-gold project in Ecuador. Osisko also holds a 0.6% NSR royalty on Cascabel which it purchased from SolGold in 2022. OBL and FNB will make initial deposits totaling $100M to SolGold in three equal tranches to fund the Project’s pre-construction costs. The first tranche of the Pre-Construction Deposit will be funded at closing, with the two subsequent tranches subject to the achievement of key development milestones. Thereafter, the Stream Purchasers will make additional deposits totaling $650M to SolGold to fund construction costs once the Project is fully financed and further derisked. OBL will provide 30% of the Deposit in exchange for a 30% interest in the Gold Stream and FNB will provide 70% of the Deposit in exchange for a 70% interest in the Gold Stream. The 2024 pre-feasibility study for the Project’s Alpala deposit estimates total production over an initial 28-year mine life of 2.9 million tons of copper, 6.9 million ounces of gold and 18.4 million ounces of silver at an all-in sustaining cost of 69c per pound of copper. Annual deliveries to OBL over the initial 28-year mine life are expected to average approximately 12,000 gold equivalent ounces, including an average of approximately 23,000 GEOs per annum for the first 10 years. OBL will make initial cash deposits totaling $30M to SolGold to fund pre-construction costs of the Project. OBL will provide additional deposits to SolGold totaling $195M to fund construction costs of the Project, subject to conditions including execution by SolGold of an Investment Protection Agreement with the Government of Ecuador.


https://www.tipranks.com/news/the-fly/osisko-gold-franco-nevada-acquire-gold-stream-on-solgold-project-in-ecuador

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Base Metals

EGA completes design phase of next generation smelting technology,…

Emirates Global Aluminium have announced the completion of the design phase of the company’s next generation smelting technology, EX.

EX reduction cells are larger than EGA’s most recently industrialised technology DX+ Ultra, enabling higher amperage and improved current efficiency, increasing production capacity by up to 22 per cent.

EX has been designed with two variants – one to maximise productivity, and the other to further minimise greenhouse gas emissions. Reduced electricity consumption along with lower net carbon consumption and the reduced incidence of anode effects is expected to reduce greenhouse gas emissions per tonne of aluminium produced by around five per cent for the more productive variant and around 12 per cent for the lower energy variant.

DX+ Ultra is already one of the most efficient smelting technologies in the global aluminium industry.

EGA now intends to construct 10 pilot EX reduction cells at the company’s aluminium smelter in Al Taweelah to test and validate performance. The target is that EX is ready for full industrialisation by 2028.

Abdulnasser Bin Kalban, Chief Executive Officer of Emirates Global Aluminium, said: “Technology development has been a foundation of our global competitiveness for decades. EX technology will enable the production of more aluminium with less energy and lower emissions, unlocking opportunities for EGA’s growth and helping us to meet the increasing global demand for the low carbon primary aluminium required to reach net zero by 2050.”

Innovations in the design of EX technology are expected to deliver enhanced pot performance with improvements to busbars, superstructure and potshells, leading to lower surrounding temperatures and better working environment.

The new technology was developed over 18 months by EGA’s Technology Development Design team. The pilot reduction cells are expected to be commissioned during the first quarter of 2025.

EGA has developed its own aluminium smelting technology in the UAE for more than 30 years. The company has used its own technology in every smelter expansion since the 1990s and has retrofitted all its older production lines.

EGA was the first UAE industrial company to license its core process technology internationally, in a deal with Aluminium Bahrain in 2016 for use in the Bahraini company’s Potline 6 expansion project.


https://aluminiumtoday.com/news/ega-completes-design-phase-of-next-generation-smelting-technology-readies-pilot-reduction-cells

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Iron Ore

Iron ore slips, investors eye stimulus signal from key China meeting

UPDATE 1-Iron ore slips, investors eye stimulus signal from key China meeting

Updates closing prices, adds details

By Gabrielle Ng

SINGAPORE, July 16 (Reuters) -Iron ore futures retreated on Tuesday, as investors awaited details of economic reform measures from top consumer China's third plenum, after a slew of weaker-than-expected data triggered demand concerns.

The most-traded September iron ore contract on China's Dalian Commodity Exchange (DCE) DCIOcv1 ended daytime trade 0.96%lower at 824 yuan ($113.41) a metric ton, following a rise of more than 1% on Monday.

The benchmark August iron ore on the Singapore Exchange was down1.51% at $107.2 a ton.

Analysts expect cutting debt and boosting confidence to be the main focus of a third plenum in Beijing this week, although solving one of those problems may make it difficult to fix another. The plenum is a key Communist party leadership meeting that focuses on long-term economic reforms.

Hopes of more stimulus had mounted after China's second-quarter economic growth and new bank lending in June missed expectations.

China's 70-city property prices continued to see "discouraging" declines in June, although some key tier 1 and 2 cities saw price stabilisation, ING analysts said in a note.

More supportive policies are expected in the coming months, as stabilising the property market is a key step to restoring confidence, added ING.

Weighing down ore prices is also the expectation of more arrivals in the coming weeks.

One of the world's leading iron ore suppliers Rio Tinto RIO.AX, RIO.L reported a 3% rise in its second-quarter iron ore shipments from the previous three-month period thanks to improved weather conditions.

Total inventories of imported iron ore piled at 45 major ports in China were up by2,300 tons from the prior week to hover at an overtwo-year high from July 5-11, data from consultancy Mysteel showed.

Other steelmaking ingredients on the DCE were mixed, with coking coal DJMcv1 down 0.5%, while coke DCJcv1 edged up 0.6%.

Steel benchmarkson the Shanghai Futures Exchange moved sideways. Stainless steel SHSScv1 rose nearly 0.5%,hot-rolled coil SHHCcv1 ticked up 0.05%,wire rod SWRcv1 dipped 0.35%, and rebar SRBcv1 was flat.

($1 = 7.2656 Chinese yuan)

Reporting by Gabrielle Ng and Amy Lv; Editing by Sohini Goswami and Eileen Soreng


https://www.xm.com/research/markets/allNews/reuters/iron-ore-slips-investors-eye-stimulus-signal-from-key-china-meeting-53881316

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Coal

UK Court Hears Legal Challenge Over Controversial Coal Mine Approval

Environmental campaigners have launched a legal challenge against the British government's approval of the nation's first new deep coal mine in decades. Friends of the Earth and South Lakeland Action on Climate Change argued that ministers failed to consider the international repercussions of approving the mine, which they discussed at London's High Court on Tuesday.

The challenge targets the previous Conservative government's 2022 decision to approve the coking coal mine in northwest England. Legal representatives for SLACC asserted that the approval undermines Britain's status as a climate leader by potentially encouraging other nations to greenlight fossil fuel projects.

The British government ceased defending the decision after a Supreme Court ruling mandated that planning authorities consider the environmental impact of burning fossil fuels, not just their extraction. However, West Cumbria Mining continues to advocate for the project, arguing it is vital for domestic steel production and won't lead to an overall increase in greenhouse gas emissions.

West Cumbria Mining's lawyer, James Strachan, stated that the mine would fulfill a domestic demand for coking coal and improve Britain's global reputation. On the other hand, campaign group lawyers maintained that the international consequences of the mine's approval are pivotal and were overlooked by ministers. The hearing is set to conclude on Thursday, with a judgment expected later.

(With inputs from agencies.)


https://www.devdiscourse.com/article/headlines/3019098-uk-court-hears-legal-challenge-over-controversial-coal-mine-approval

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Steel, Iron Ore and Coal

European HRC market experiences quiet start to the week

The price of European domestic hot-rolled coil remained largely unchanged, as the industry is now in the holiday season, with many market participants currently out.

Some market sources believe that mills are still attempting to test the market by increasing prices, but others remain skeptical, stating that consumer interest is not present enough in the market for there to be any change.

“I think European mills will definitely try to increase prices,” one trader said.

“Market is still too low and will be for the rest of the year,” a service center source said. “There is no activity in the market.”

With demand remaining low and supply remaining well ahead in Europe, some market sources have commented that mills are struggling to find orders.

“The market is flat, mills are desperate for quantities,” a distributor said. As long as consumption doesn’t pick up, there will not be any change in prices, the distributor added.

Platts assessed Northwest European HRC stable on the day at Eur625/mt ex-works Ruhr on July 15.

Meanwhile, Platts assessed domestic HRC prices in Southern Europe also stable on the day at Eur625/mt ex-works Italy on July 15.

Some indications were heard for carbon accounted steel, with an offer for premium reported at Eur95-140/mt, with a CO2 content around 0mt at scopes 1-2.

Platts assessed the carbon-accounted premium for HRC in Europe down Eur5/mt on the day at Eur120/mt July 15.

Geraint Moody

spglobal.com


https://eurometal.net/european-hrc-market-experiences-quiet-start-to-the-week/

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Rio Tinto to boost 2H Australian iron ore shipments

UK-Australian mining firm Rio Tinto must ship at least 165mn t of iron ore from Western Australia (WA) during July-December, after a derailment disrupted exports in April-June, cutting first half sales to 158mn t.

The firm maintained its WA iron ore shipments guidance of 323mn-338mn t for 2024 on a 100pc basis, despite losing six days of port deliveries because of a derailment in May. It shipped 80.3mn t of iron ore from WA on a 100pc basis during April-June, up from 78mn t for January-March, when cyclone-season weather disrupted exports. It was also up by 2pc from April-June 2023, as productivity gains offset ore depletion.

The target of 165mn-180mn t for July-December is achievable for Rio Tinto, which often boosts shipments in the second half of a calendar and its financial year. It shipped 170.7mn t during July-December 2023 and 161.7mn t for January-June 2023, for a total of 332mn t in 2023.

Low-grade SP10 iron ore made up 17pc of its WA sales during January-June, up from 14pc through 2023, 11pc in 2022 and zero in 2015. The firm warned that SP10 levels are expected to remain elevated until new mining projects are delivered, which is subject to approvals and heritage clearance.

The proportion of the high-grade Pilbara Blend fell to 58pc for January-June from 61pc through 2023, 64pc in 2022 and 73pc in 2015. Rio Tinto is developing higher grade deposits, such as its 40mn t/yr Rhodes Ridge project, to try to reverse the grade decline in WA.

The firm maintained its 2024 cash cost guidance for WA iron ore at $21.75-23.50, while warning this would be the top end of this for January-June because of the lower volumes sold. It achieved an average price of $97.30/wet metric tonne (wmt) fob WA in January-July, down from $98.60/wmt in the same period last year. The equivalent price for January-June 2024 at an 8pc moisture assumption is $105.80/dry metric tonne (dmt) fob WA.

The Argus ICX price for 62pc Fe fines averaged $117.33/dmt cfr Qingdao in January-June, down from $118/dmt in the same period last year.

The Iron Ore Company of Canada (IOC) — in which Rio Tinto owns 59pc — sold 8.65mn t in January-June, up 7pc on the same period last year. It is expected to raise production during July-December with better seasonal conditions to produce as much as 19.5mn t in 2024.


https://www.argusmedia.com/en/news-and-insights/latest-market-news/2587967-rio-tinto-to-boost-2h-australian-iron-ore-shipments?

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