How Rio Tinto aims to overcome its lower grades

Quarter by quarter, Rio Tinto has been producing more lower-grade SP10 iron ore than it has Pilbara Blend, which has a grade of 62 per cent iron.

Across comparable periods, Rio’s production of SP10 lump increased 103 per cent in the nine months to September’s end, while Pilbara Blend lump production decreased 12 per cent.

The company used last week’s quarterly announcement to announce it would conduct a review into its iron ore business to investigate the declining grades, and on Friday, Rio iron ore boss Simon Trott lifted the lid on more details regarding the review.

“Our portfolio is changing,” Trott told reporters at a Melbourne Mining Club luncheon. “We’re already taking material from the Pilbara, IOC (Rio’s Canadian iron ore operation) and third parties, and with Simandou coming on it gives us another value to the portfolio.

“So it’s time to have another look at it and say, ‘What is the best way across our assets going forward to present those products to market?’.”

Trott said, with the inclusion of the Simandou iron ore mine in Guinea, which is targeting first production in 2025, Rio could look to blend iron ore from its various global operations to optimise the product.

Trott also explained the introduction of the Rhodes Ridge iron ore mine and how that evolves the nature of Rio’s iron ore operations. In December 2023, Rio approved a pre-feasibility study to progress Rhodes Ridge’s development, however, the project has faced development hurdles.

If brought online, Rhodes Ridge is set to produce up to 40 million tonnes of iron ore annually to start with, with further expansions to ensue.

Trott said a review is a periodic process Rio goes through every few years to investigate better ways of maximising its businesses.

“You start in the places that are best,” he said. “We’ve kept Pilbara Blend the same for … 20 years or so. We’ve looked at the product strategy periodically, we looked at it in around 2018; it’s time to have another look.”