The miner said iron ore shipments from Australia’s Pilbara region came to 338.2mln tonnes, up from 330.1mln tonnes a year ago, supported by investments in productivity improvements, minimal weather disruptions and the ramp-up of expanded mine sites.
However, iron ore prices fell 4% to US$62.5 per dry metric tonne.
For 2019, the group set a target of 338mln tonnes to 350mln tonnes. The company said a fire that broke out at one of its major ports in Pilbara on January 10 would result in “limited disruption” on its shipments of Robe Valley lump and fine iron ore products.
The fire at Rio Tinto’s Cape Lambert Port near Karratha damaged a part of the plant that separates the two products, leading the company to declare “force majeure” on its contracts with affected customers. However, the fire did not impact exports of the miner’s premium product, ‘Pilbara blend'.
Iron ore accounts for the biggest share of the miner’s earnings but copper production was the standout performer last year, rising 33% year-on-year to 634000 tonnes.
Copper production growth was led by a strong performance at the Escondida mine in Chile and US business Rio Tinto Kennecott.
“We delivered a solid operational performance in the final quarter of 2018, in particular across our copper assets,” said Rio Tinto chief executive Jean-Sebastien Jacques.
“During the year, we further strengthened our asset portfolio, continuing to invest in high-quality growth. 2018 saw the early completion of Amrun, the deployment of AutoHaul™, the Koodaideri and Robe River investments and the signing of the power agreement at Oyu Tolgoi.”
Last year the company sold US$8.6bn worth of business, including the Grasberg mine in Indonesia and remaining coal assets.
Goldman Sachs kept a 'neutral' rating on the stock but cut its target price to 4,100p from 4,200p to reflect its downwardly revised earnings estimates.
"While the 62% iron ore price (the majority of Rio’s iron ore sales) has been strong, we believe that as the market concerns we have highlighted intensify, iron ore prices will come under greater pressure," Goldman said.
"We would expect this to be a negative for Rio, as more than 60% of the company’s 2019E EBITDA comes from iron ore."
Shares in Rio were up 0.49% to 3,916p in morning trading.