The largest Australian iron ore producer Rio Tinto said that the guidance for its iron ore sales in 2020 will be five percent or about 16 million mt higher compared to the volumes expected to be shipped this year. The target for 2020 is about 336-346 million mt, while in 2019 the producer expects to sell 320-330 million mt of iron ore.
This means that Rio Tinto will keep production of iron ore at improved levels in 2020 and subsequently, following some output reduction in the first half of 2019. In the third quarter this year, “the Pilbara system has, at times, operated at 360 million mt per annum run rates, but not on an annual basis,” Rio Tinto said. The same annualised system capacity is expected once the Koodaideri phase I is fully commissioned, so the producer will be able to maintain production for the longer term. The launch of the Koodaideri phase I is planned for late 2021.
Total capital expenditure for 2020 will increase from $5.5 billion in 2019 to $7 billion.