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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 yesterday 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.
Yesterday’s announcement suggests the program is firmly back on track.
Rio also yesterday 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 yesterday.
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 full-year 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.
Morgans analyst Adrian Prendergast noted iron ore prices had been stronger than people predicted of late, which should be a driver for the company’s earnings.
Rio also noted yesterday that development of its $468 million, 20mtpa Silvergrass mine was on target for full commissioning in the fourth quarter, with earthworks already completed and installation of the conveyor under way.
Shares in the company closed down 98¢, or 1.49 per cent, at $64.94 yesterday.
This article first appeared on thewest.com.au
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