Rio Tinto (LON:RIO) has released strong production results for Q3 2016. Iron ore production was up 2% YoY and 3% QoQ to 83.2mnt, however, we note a 5% YoY and 2% QoQ decline in shipments due to rail maintenance. This is likely to impact 4Q 2016 also as shipment guidance has been reduced for iron ore to 325-330mnt for the full year. Met coal production was up strongly, 17% YoY and 21% QoQ to 2.18mnt, due to outperformance at the Kestrel mine. Thermal coal production was down 2% YoY and up 4% QoQ to 5.4mnt due to planned mine sequencing at Hunter Valley.
Aluminium production of 924kt was up 11% YoY and 1% QoQ owing to the restart of the Kitimat smelter earlier this year. Bauxite production of 12.4mnt was up 10% YoY and 3% QoQ driven by record performance at Weipa and Gove arising from productivity enhancements. Guidance for the full year remains unchanged for aluminium and bauxite at 3.6mnt and 47mnt respectively.
Titanium dioxide production was up 10% YoY and 13% QoQ to 267kt; however, production for the full year remains down 14% YoY as a result of significant idled capacity. Diamond production of 4.4mnct was flat QoQ although up 3% YoY.
Copper production of 133kt was up 16% YoY although down 4% QoQ. The impact of weak grades at Escondida was offset by strong performance at Kennecott where production was up 63% YoY although down 3% QoQ to 36kt.
Exploration spending was marginally lower at US$379m versus US$392m in 3Q 2015.