Rio Reaffirms Plan to Meet 360 Million Ton Iron Ore Targetby
Second-biggest miner still positive on long-term demand
Producer has no plans to exceed capacity target, chairman says
Rio Tinto Group, the second-largest mining company, reaffirmed its goal to raise annual iron ore output in Australia to 360 million metric tons amid forecast growth demand in Asia.
The company will seek to fully utilize capacity in its network of mines, railroads and ports in the Pilbara district of Western Australia within a few years, Chairman Jan du Plessis said Thursday at an annual meeting in Brisbane, Australia. London-based Rio has no current plans to raise output beyond that level, he said.
Rio last month trimmed guidance on its 2017 output from its Australian mines by as much as 6 percent to between 330 million tons and 340 million tons, citing delays completing an autonomous railway system. BHP Billiton Ltd. pared guidance by about 4 percent to 260 million tons for the year to June 30, citing poor weather and rail network maintenance.
“We continue to be very positive about the long-term demand for iron ore across Asia,” du Plessis said at the meeting. “We see demand coming not just from China, but from many other countries in Asia as well other than China, over time. We are very confident that we have got a good business.”
Iron ore, Rio’s top earner, has confounded forecasters through 2016, rising about 38 percent to rebound from three straight annual declines on an improving outlook in China and stronger steel demand from the country’s infrastructure and property building. Decisions by Rio and BHP to revise production forecasts are a further positive for market sentiment, according to UBS Group AG.