Rio on track for driver­less trains

Pilbara News - - News - Stu­art McKin­non

Rio Tinto says it is on track to com­plete the tran­si­tion to driver­less trains across its Pil­bara iron ore net­work by the end of next year.

The min­ing gi­ant re­vealed last week in its sec­ond quar­ter op­er­a­tions re­view that its so-called Au­toHaul sys­tem had com­pleted 20 per cent of all train kilo­me­tres in au­ton­o­mous mode but with driv­ers still aboard manag­ing safety and re­li­a­bil­ity sys­tems. But the miner ex­pects 100 per cent of its net­work to be fully driver­less by the end of 2018.

Rio launched Au­toHaul in 2012 but re­vealed early last year it was strug­gling to in­te­grate the com­plex soft­ware sys­tems into a pack­age that would al­low it to move to a com­pletely au­ton­o­mous sys­tem.

Last week’s an­nounce­ment sug­gests the pro­gram is firmly back on track. Rio also gave full-year Pil­bara iron ore ship­ment guid­ance of 330mt (on a 100 per cent ba­sis) at the low end of a pre­vi­ous guid­ance range of be­tween 330mt and 340mt.

It at­trib­uted the fig­ure to wet weather in the first quar­ter and ac­cel­er­ated rail track main­te­nance in the sec­ond quar­ter.

The miner also cau­tioned that rail main­te­nance would con­tinue through­out the re­main­der of the year, al­beit at a lower level than in the sec­ond quar­ter. Rio pro­duced 157mt in the first half, a 2 per cent fall on the pre­vi­ous cor­re­spond­ing pe­riod and 79.8mt in the sec­ond quar­ter, which rep­re­sented a one per cent fall on the same pe­riod in the pre­vi­ous year.

The com­pany achieved an av­er­age price of $US62.40/wmt for its ore in the first half, up from its av­er­age $US49.30/wmt in 2016.

The iron ore spot price was up $US1.07, or 1.6 per cent, to $US66.81/dmt late last week.

RBC Cap­i­tal Mar­kets an­a­lyst Paul His­sey said the softer re­sult for Pil­bara iron ore pro­duc­tion was un­ex­pected but he re­mained con­fi­dent that Rio would meet its ful­lyear guid­ance even af­ter ac­count­ing for fur­ther rail main­te­nance works.

The in­vest­ment bank has an out­per­form rat­ing on the stock and a price tar­get of $75.

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