Rio Tinto trims Australian iron ore production due to delay in driverless-train project

19 April 2016 (Last Updated April 19th, 2016 18:30)

Mining major Rio Tinto has cut its production guidance from its Australian iron ore mines for 2017, due to a delay in advancing its AutoHaul transport project.

Mining major Rio Tinto has cut its production guidance from its Australian iron ore mines for 2017, due to a delay in advancing its AutoHaul transport project.

The company said that testing and verification of its $518m autonomous transport technology is still continuing, with more than 75,000km of mainline trials completed.

Due to the delay, production from its Pilbara mines is expected to be between 330 million tonnes and 340 million tonnes in 2017, subject to final productivity as well as capital expenditure plans.

Rio Tinto's autonomous train plan has been under development since 2012 and follows the deployment of 71 autonomous trucks at its iron ore mines in Australia.

"These results demonstrate our commitment to operational excellence in 2016, with notable improvements in several important areas, including a strong performance in aluminium."

At that time, the company unveiled its plans saying that the trains are expected to travel roughly 1,300km of rail to ports where cargo ships are loaded for delivery to Asian customers, The Wall Street Journal reported.

The company's Pilbara operations produced 79.9 million tonnes in the first quarter of 2016, which is 12% higher than the same quarter of 2015.

Sales of 76.7 million tonnes at the operations in 2015 were 11% higher than in the first quarter of 2015 and were around three million tonnes below production in the first quarter of 2016 due to several reasons.

Rio Tinto chief executive Sam Walsh said: "These results demonstrate our commitment to operational excellence in 2016, with notable improvements in several important areas, including a strong performance in aluminium.

"However, we continue to experience volatility in commodity prices across all markets. In the face of a testing external environment, our focus remains on delivering further cost and productivity improvements, disciplined capital management and maximising free cash flow, to ensure that Rio Tinto remains strong."