Rio Tinto Chief Executive J-S Jacques said “In these uncertain and unprecedented times we continue to deliver products to our customers with our first priority to protect the health and safety of all our employees and communities. We are focused on maintaining a business as usual approach and have taken extensive measures to ensure we can do so safely.
“All of our assets continue to operate and we achieved a very robust production performance in the first quarter. Our world-class portfolio and strong balance sheet serve us well in all market conditions and are particularly valuable in the current volatile environment. Our resilience and value over volume strategy mean we can continue to invest in our business, and support our communities and host governments.”
Production*
Q1 2020 vs Q1 2019 vs Q4 2019
Pilbara iron ore shipments (100% basis) Mt 72.9 +5% -16%
Pilbara iron ore production (100% basis) Mt 77.8 +2% -7%
Bauxite Mt 13.8 +8% -9%
Aluminium kt 783 -2% 0%
Mined copper kt 133.0 -8% -4%
Titanium dioxide slag kt 293 -1% +3%
IOC iron ore pellets and concentrate Mt 2.6 +3% 0%

*Rio Tinto share unless otherwise stated
Q1 Operational update
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We are protecting the health of our employees and communities through rapid implementation of health and hygiene controls in response to Covid-19. We have also strengthened our focus on safety programmes to ensure the safety of our employees during a period of significant change.
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Pilbara iron ore shipments of 73 million tonnes (100% basis) were 5% higher than the first quarter of 2019, driven by a strong recovery across the network in March following tropical cyclone Damien in February 2020. The portside trading trial continues in China with the 1 millionth tonne of ore sold.
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Bauxite production of 13.8 million tonnes was 8% higher than the first quarter of 2019, following the successful ramp-up of Amrun in 2019. Third party shipments of 9.5 million tonnes in the quarter were 7% higher than the same period of 2019.
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Aluminium production of 0.8 million tonnes in the first quarter was 2% lower than the first quarter of 2019 with ISAL operating at 85% capacity in line with our value over volume strategy.
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Mined copper production of 133 thousand tonnes was 8% lower than the same period in 2019, reflecting anticipated lower copper grades, partially offset by higher throughput.
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At Kennecott in the US, we are working to resume normal operations following a 5.7 magnitude earthquake on 18 March. The mine, concentrator, tailings storage facility and refinery have all resumed safe and stable operations. There was some damage to the furnace, which impacts full year copper guidance (see below).
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Titanium dioxide slag production of 293 thousand tonnes was 1% lower than the first quarter in 2019 partly due to Covid-19 restrictions in Quebec and South Africa.
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Production of pellets and concentrate at the Iron Ore Company of Canada (IOC) was 3% higher than the same period of 2019.
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All major projects progressed well in the first quarter, but are now being affected by Covid-19 including government imposed restrictions on the movement of goods and people. Recovery rates may differ across regions - we will update the market once the situation stabilises.
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Capital expenditure is now expected to be $5 to 6 billion in 2020 (down from the previous guidance of $7 billion) partly due to Covid-19 constraints, and partly due to the favourable currency impact from the strong US dollar. Capital expenditure originally planned for 2020 may subsequently flow into 2021 and 2022, and we will provide a further update on capital re-phasing in due course.
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We are continuing to work with our customers to fulfil orders and meet their requirements while complying with government directives. Our customer order books remain healthy, with our commercial teams focusing on business continuity and customer support.
Covid-19
Our markets
Demand in China continues to recover. In the rest of the world, the outlook is more uncertain. Commodity supply is being disrupted as Covid-19 restrictions impact supply chains and people movement globally.
• Demand for the high-quality iron ores we produce remained strong in the first quarter of 2020, mainly driven by a combination of seaborne supply disruptions and solid demand from China’s steel mills despite Covid-19 impacts.
• The market for primary aluminium contracted further in the first quarter of 2020 primarily due to lower automotive production.
• China’s demand for imported bauxite continued to grow in the first quarter, as domestic reserves continue to decline in quality and quantity, and mine production was disrupted by Covid-19 restrictions.
• Although copper demand remained reasonable in the quarter, the decline in the price reflects deteriorating industrial growth expectations globally.
• To some extent, weaker commodity prices also reflect decreasing industry supply costs, which are falling due to a strong US dollar and tailwinds from lower energy and freight costs, partly offset by Covid-19 related expenditure.
Our assets
We have introduced measures to combat the spread and impacts of Covid-19, to ensure we keep our employees and communities safe, and our operations running. We are working closely with governments around the world to ensure our operations continue to contribute to society during this challenging time. Our assets are operating with some Covid-19 restrictions in place to comply with government directives. Full details of initiatives taken to date can be found on our website: www.riotinto.com/news/releases. Specifically, we have implemented the following actions:
Workforce
• We have changed rosters at our Iron Ore operations, construction and exploration projects meaning fewer crew changeovers at our sites and in our operations centre to reduce the risk of transmission.
• The majority of employees and critical contractors on national fly-in-fly-out (FIFO) arrangements have been relocated to Western Australia.
Operations
• We have reduced mining operations at Richards Bay Minerals (RBM) in South Africa in compliance with a government directive to effect a lockdown on 26 March for 21 days. The rail and port remain open for product shipments.
• We are working with the government of Quebec to comply with the directive to slow down non-critical projects and activities for our Quebec operations.
• We have shut down the fourth pot-line at the Tiwai Point smelter in New Zealand (NZAS) with production continuing on the other three lines to comply with government lockdown requirements for containing the spread of Covid-19 and to support the health and safety of our people at the site.
Products
• We have changed our product mix at IOC to focus on the production of concentrates in order to match market demand.
• In aluminium, in response to market conditions we have reduced the proportion of primary metal being produced as value added products.
Guidance
Production guidance
Rio Tinto share, unless otherwise stated
2020 (current)
2020 (previous)
Pilbara iron ore (shipments, 100% basis)
324 to 334 Mt
324 to 334 Mt
Bauxite
55 to 58 Mt
55 to 58 Mt
Alumina
7.8 to 8.2 Mt
7.8 to 8.2 Mt
Aluminium
3.1 to 3.3 Mt
3.1 to 3.3 Mt
Mined copper
475 to 520 kt
530 to 570 kt
Refined copper
165 to 205 kt
205 to 235 kt
Diamonds
12 to 14 M carats
12 to 14 M carats
Titanium dioxide slag
At lower end of 1.2 to 1.4 Mt
1.2 to 1.4 Mt
Iron Ore Company of Canada
pellets and concentrate
10.5 to 12.0 Mt
10.5 to 12.0 Mt
Boric oxide equivalent
~0.5 Mt
~0.5 Mt
• We will continue to monitor and adjust production levels and product mix to meet customer requirements in 2020, in line with our value over volume strategy, government imposed restrictions related to Covid-19, and any other potential Covid-19 related disruptions.
• Mined and refined copper guidance is lowered due to a potential reduction in second half output at Escondida from Covid-19 measures and the earthquake repairs at Kennecott.
• Titanium dioxide slag guidance is expected to be at the lower end of the prior guidance range due to Covid-19 restrictions instructed by the governments in Quebec and South Africa.
Operating costs
• Pilbara iron ore 2020 unit cost guidance of $14-$15 per tonne remains unchanged.
• Copper C1 unit cost guidance in 2020 is unchanged at 120-135 US cents/lb.
Investments, growth and development projects
• All major projects progressed well in the first quarter, but are now being affected by the Covid-19 restrictions. The team is investigating ways to mitigate Covid-19 impacts including those associated with roster changes, travel restrictions and the design and fabrication of long lead items in China and Europe. Whilst it is too early to estimate, the restrictions are likely to have some impact on our progress. Recovery rates may differ across regions - we will update the market once the situation stabilises.
• Capital expenditure is now expected to be $5 to 6 billion in 2020 (down from the previous guidance of $7 billion) partly due to Covid-19 constraints, and partly due to the favourable currency impact from the strong US dollar. Capital expenditure originally planned for 2020 may subsequently flow into 2021 and 2022, and we will provide a further update on capital re-phasing in due course.

• Exploration and evaluation spend in the first quarter was $144 million, 16% higher than the first quarter of 2019, reflecting an increase in central exploration including the Winu copper/gold project in Western Australia, and higher spend associated with our Jadar borates/lithium project in Serbia.
Pilbara replacement projects
• Overall construction is progressing with key personnel retained in Western Australia following the implementation of border controls to limit the transmission of Covid-19.The ramp-up of Koodaideri is still expected to occur in early 2022.
• The other Pilbara projects remain largely on track including Western Turner Syncline Phase 2 and Robe River Joint Venture sustaining projects (West Angelas C&D and Mesas B, C and H at Robe Valley). Environmental approval of Mesa H is progressing.
• We are working closely with the authorities to prevent any delay in the permitting process from Covid-19.
Oyu Tolgoi underground project
• As announced on 16 March 2020, work on the Oyu Tolgoi underground project continues, and we are achieving strong productivity in underground development (1,939 equivalent metres in March, average monthly 1,815 equivalent metres).
• Despite these gains, progress has slowed as a result of restrictions placed on the movement of people to contain the spread of Covid-19, including specialist commissioning personnel as well as goods.
• Work continues on the mine design and we still expect this to be completed in the first half of 2020 with the Definitive Estimate1 of cost and schedule in the second half of 2020. This will include the estimate of development capital costs and schedule for the underground project based on the updated design of Panel 0.
• Based on current information, the underground project remains within the range announced in July 2019 of a 16 to 30 month delay in schedule and an increase of $1.2 to $1.9 billion in development capital costs. Depending on how long they are in place, Covid-19 restrictions may impact the schedule range.
Other key projects and exploration and evaluation
• Phase one of the south wall pushback project at Kennecott remains on track with access to higher grades expected from 2021.
• The Zulti South project in South Africa continues to be on hold. A restart will not occur until Covid-19 restrictions have been fully lifted and security and community issues have been resolved.
• Construction of the second tunnel at the Kemano hydropower facility at Kitimat, British Columbia has been put on care and maintenance due to contractor availability. We are evaluating the impact and next steps to resume progress on the project.
• The Resolution Copper project in Arizona is progressing, with shaft 9 on schedule reaching 1.8 kilometres of the targeted 2.1 kilometres at the end of March.
• Construction of the ELYSIS research and development centre in the Saguenay has been temporarily suspended, aligned with the Covid-19 measures introduced by the Quebec government.
• On the Winu preliminary study for the copper/gold deposit in Western Australia, Covid-19 precautionary measures are in place. Drilling and fieldwork activities continue as planned at present. Future activities are likely to be affected by Covid-19 restrictions including the ability to move people and gain access to sites.
• Activities at the Falcon diamond study in Saskatchewan have been scaled back in response to Covid-19 constraints, with the 2019 bulk samples now being processed by the recently commissioned bulk diamond sampling plant.

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https://www.riotinto.com/news/releases/Rio-Tinto-releases-first-quarter-production-results

Escondida
Mined copper production at Escondida was 13% higher than the same quarter of 2019 due to higher concentrator throughput, and a higher amount of material stacked at the sulphide leach pads.
Oyu Tolgoi
Mined copper production from the open pit was 23% lower than the same quarter of 2019 due to decreased head grade. Grades were 26% lower than the same quarter in 2019 due to sequencing and blending of low-grade stockpiles. First quarter sales have been affected by slower collections of product from the warehouse by customers due to curtailed operations in China during peak Covid-19 restrictions.