Rio Tinto releases first quarter production results

Rio Tinto Chief Executive Jakob Stausholm, said: "We made notable progress during the quarter with the commencement of underground mining at Oyu Tolgoi following a comprehensive agreement reached with the Government of Mongolia, completed the acquisition of the Rincon lithium project in Argentina, and signed a framework agreement at the Simandou iron ore project in Guinea. These projects are all aligned with our strategy of growing in materials essential to a decarbonising world.

"Production in the first quarter was challenging as expected, re-emphasising a need to lift our operational performance. We launched seven more deployments of the Rio Tinto Safe Production System, building on the achievements from the previous rollouts. As we ramp up Gudai-Darri, our iron ore business will have greater production capacity and be better placed to produce additional tonnes of Pilbara Blend in the second half.

"We released an independent report on our workplace culture and are implementing all 26 recommendations to make positive and lasting changes. We also announced an agreement with the Yinhawangka Aboriginal Corporation on a new co-designed management plan to ensure the protection of significant social and cultural heritage values.

"These actions will ensure we continue to deliver attractive returns to shareholders, as we invest in sustaining and growing our portfolio, be a partner and employer of choice and progress our ambition to achieve net-zero carbon emissions."

Q1 2022 operational highlights and other key announcements

• The safety, health and well-being of our workforce and the communities in which we operate are key priorities for our business. Our all-injury frequency rate of 0.33 is an improvement from the first quarter of 2021 (0.36), and an improvement against the prior quarter (0.41). We experienced increased COVID-19 cases on-site in the Pilbara following the Western Australian border opening and spikes in cases across our other operations. We continue to monitor new variants and will remain vigilant.

• Pilbara operations had a challenging first quarter, as expected. We produced 71.7 million tonnes (100% basis), 6% lower than the first quarter of 2021. Pilbara shipments in the first quarter were 71.5 million tonnes (100% basis), 8% lower than the first quarter of 2021. We expect increased production volumes and improved product mix in the second half with the commissioning and ramp up of Gudai-Darri, commissioning of the Robe Valley wet plant and improved mine pit health. Full year shipments guidance remains unchanged.

• Bauxite production of 13.6 million tonnes was in line with the first quarter of 2021 with similar wet weather disruptions as the corresponding period.

• Aluminium production of 0.7 million tonnes was 8% lower than the first quarter of 2021 due to reduced capacity at our Kitimat smelter in British Columbia following the strike which commenced in July 2021. Preparations continue for the Kitimat smelter to progressively restart from June 2022 with full ramp up expected by the end of the year. All our other smelters continued to have stable performance, despite considerable challenges related to unplanned employee absences due to COVID-19.

• Mined copper production of 125 thousand tonnes was 4% higher than the first quarter of 2021 due to higher recoveries and grades at Kennecott, partly offset by lower grades at Oyu Tolgoi and lower throughput at Escondida. On 1 April, we announced a new five-year Collective Bargaining Agreement had been reached with unions representing approximately 1,300 employees at the Kennecott operation.

• On 25 January, we announced we had reached agreement with Turquoise Hill Resources and the Government of Mongolia to move the Oyu Tolgoi project forward, resetting the relationship between the partners and increasing the value the project delivers for Mongolia. This step unlocks the most valuable part of the mine, with first sustainable production expected in the first half of 2023.

• On 14 March, we announced we had made a non-binding proposal to the Turquoise Hill Board to acquire the approximately 49% of the issued and outstanding shares of Turquoise Hill that Rio Tinto does not currently own. The proposed acquisition price is C$34 per share which values Turquoise Hill minority shareholdings at US$2.7 billion.

• Titanium dioxide slag production of 273 thousand tonnes was 2% lower than the first quarter of 2021 as a result of equipment reliability issues at Rio Tinto Fer et Titane (RTFT), Canada, partly offset by continuing ramp up at Richards Bay Minerals (RBM) in South Africa. On 18 March, we announced the lifting of force majeure on customer contracts at RBM, that had been in place since 30 June 2021.

• Production of pellets and concentrate at Iron Ore Company of Canada (IOC) was 3% higher than the first quarter of 2021, which was impacted by mine feed constraints. There is good progress on the initiation of Rio Tinto Safe Production System (RTSPS) at the concentrator.

• In the first quarter, we initiated seven more deployments of the RTSPS at five sites focusing on sustainably unlocking capacity across the Rio Tinto system. We are already seeing promising results for example at West Angelas achieving the best effective utilisation of its production drills across Pilbara iron ore.

• On 29 March, we announced the completion of the acquisition of the Rincon lithium project for $825 million, following approval from Australia's Foreign Investment Review Board. Rincon is a large undeveloped lithium brine project located in Argentina - the heart of the Latin American lithium triangle.

• In the first quarter, we entered into partnerships and progressed initiatives to accelerate decarbonising our own business and the value chains we operate. These include an agreement with the Tasmanian Government to jointly investigate how the Bell Bay smelter can help support the development of new industries, and with the US Department of Energy who have provided funding for a Rio Tinto-led team to explore carbon storage potential at the Tamarack nickel joint venture in central Minnesota.

• On 8 April, we released Taxes Paid: Our Economic Contribution 2021, showing that we made a total direct economic contribution of $66.6 billion in the countries and communities where we operate and paid $13.3 billion of taxes and royalties.

• On 24 February, we announced that Hinda Gharbi is stepping down as a non-executive director at the conclusion of the Rio Tinto Plc AGM on 8 April 2022 to join Bureau Veritas, initially as Chief Operating Officer and transitioning in 2023 to the position of Chief Executive Officer.

• On 6 March, we announced that we had reached a settlement with the Australian Securities and Investment Commission (ASIC) regarding the disclosure of the impairment of Rio Tinto Coal Mozambique, which was reflected in Rio Tinto's 2012 year-end accounts. As part of this court approved settlement between ASIC and Rio Tinto, there were no findings of fraud or any systemic or widespread failure by Rio Tinto.

• We continue to offer support to our team members of Ukrainian and Russian heritage and we have committed $5 million to humanitarian agencies. We are in the process of terminating commercial relationships with Russian businesses, while also ensuring the well-being of our people, our contribution to communities, and the continued safe operation of our businesses. As a result of the Australian Government's sanction measures, we have taken on 100% of the capacity and governance of Queensland Alumina Ltd. (QAL) until further notice. QAL is 80% owned by Rio Tinto and 20% owned by Rusal. Our focus remains on ensuring the continued safe operation of QAL, as a significant employer and contributor to the local Gladstone and Queensland economies.

• All figures in this report are unaudited. All currency figures in this report are US dollars, and comments refer to Rio Tinto's share of production, unless otherwise stated.

The full first quarter production results are available here.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220419005718/en/

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This announcement is authorised for release to the market by Steve Allen, Rio Tinto's Group Company Secretary.

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