Record iron production in Q1
Releasing the group’s Q1 operational update on Tuesday‚ Chief Executive Sam Walsh said “Our operations achieved a solid performance in the first quarter‚ recovering rapidly from the seasonal weather disruptions.”
“At Bingham Canyon‚ last week’s pit wall slide will have a significant impact on our copper production this year. A recovery plan is being implemented to minimise the economic impact‚” he said.
“Our two major growth projects in the Pilbara (Western Australia) and in Mongolia achieved significant milestones in the first quarter. Both of these industry leading projects remain on track for first production this year and are poised to deliver attractive returns for our shareholders in the years ahead‚” he added.
Walsh noted that the streamlined Executive Committee structure is now in place and demanding targets for 2013‚ including for cash cost savings‚ are locked into performance measures.
“We are making good progress in achieving our cost reduction targets and other priorities for 2013‚ and are determined in our pursuit of greater value for shareholders.”
He said the record Q1 iron production was due to the recent re-rating of Pilbara capacity through debottlenecking and productivity improvements with minimal capital expenditure. The Pilbara iron ore operations swiftly recovered from the cyclone season‚ and are now running at full capacity of 237 million tonnes per year.
Expansion of Pilbara capacity to 290 million tonnes per year remains on budget‚ and on time to achieve the accelerated completion date in the third quarter of this year.
Mined copper benefited from a sustained recovery in grades at Kennecott Utah Copper and Escondida (Chile) since the first quarter of 2012.
On 10 April 2013‚ the Kennecott Utah Copper mine experienced a slide along a geotechnical fault line of its north eastern wall. Waste movement associated with the Cornerstone extension has restarted but ore production remains suspended and timing to restart ore production remains under evaluation. The concentrator has been shut down while the smelter and refinery are currently operating at reduced levels. Based on an early assessment of information currently available‚ it is estimated that 2013 refined copper production at Kennecott Utah Copper will be approximately 100‚000 tonnes less than previously anticipated.
Commissioning of the Oyu Tolgoi copper-gold mine in Mongolia continued with first concentrate produced in January 2013. Commencement of commercial production remains on track by the end of June 2013‚ subject to the resolution of the issues being discussed with the Mongolian government.
Year to date cash cost savings are tracking on target as the impact of headcount reductions and productivity gains are gathering pace‚ the group said.
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