Rio Tinto saw all the major financial indicators for its iron ore operations soar upwards in its latest full financial year ending 31 December 2017. Whilst production and shipment levels hardly changed year-on-year, sales revenue and earnings for the product both soared.

In its operating report sent to Kallanish, the company says that it expects Pilbara shipments in 2018 to be between 330-340 million tonnes (100% basis). “This is subject to market conditions and any weather constraints, and partly reflects continued rail maintenance required in 2018,” the miner adds.

Pilbara operations produced 329.8mt (Rio Tinto share 271.3mt) in 2017, in line with 2016. A stronger performance in the second half offset the impacts of adverse weather conditions in the first quarter and accelerated rail maintenance in Q2. In addition, there was a planned two-week shutdown at Hope Downs 4 in December 2017, “… in line with the company focus on value over volume,” Rio says.

Achieved average pricing in 2017 was $59.6/wet metric ton on a fob basis versus $49.3/wmt in 2016. This equates to $64.8/dry metric ton (2016: $53.6/dmt).  The Kallanish index for 62% Fe Australian fines averaged $70.84/dmt cfr Qingdao in 2017, up 24.17% from 57.05/dmt in 2016.

In terms of operational developments, commissioning of the Silvergrass conveyor system is complete and the plant had processed around two million tonnes by the end of 2017. Production ramp-up will continue in 2018. The automation of the Pilbara AutoHaul train system continues to make “… strong” progress with over 60% of all train kilometres now completed in autonomous mode with a driver on board for supervision. That project is on schedule to be completed by the end of 2018.

Gross sales of iron ore were $18.3 billion in 2017, up 25% y-o-y. Underlying earnings surged by 45% to $6.7 billion and underlying Ebitda did likewise, by 35% to $11.5 billion, the miner confirms.