Last month world number two mining company Rio Tinto (NYSE:RIO) announced a huge slide in profit for the first half of the year with net earnings collapsing by 80%.
Profits dropped from $4.4 billion last year to $806 million in the six months to end-June largely on the back of slump in the price of iron ore.
To give an idea of just how reliant Rio has become on the fortunes of iron ore the company calculated that every 10% movement in the price equates to a just over $1 billion impact on its underlying earnings.
The Melbourne-based company said cost reductions, favourable exchange rates, volume savings and lower energy costs helped to offset the decline in the iron ore price.
Pilbara cash unit costs were driven down to $16.20 per tonne in H1 2015, compared to $20.40 per tonne during the same period last year and $18.7 in H2 2014.
Rio’s said it’s cut $1 billion of fat from its iron ore business since 2012.
And it’s not stopping there.
Rio’s technology and innovation CEO Greg Lilleyman told Mining Weekly its fleet of autonomous trucks and better analytics, part of its “Mine of the Future” programme will deliver “significant group-wide productivity improvements”:
“Rio Tinto’s first-mover status in autonomous equipment has resulted in significant productivity gains while our use of big data analytics has allowed us to safely extend maintenance cycles.
“These productivity gains, combined with our asset management programme, have us on a pathway to safely reduce maintenance costs by about $200-million a year over the next three years.”
From a building at Perth airport, world number two miner Rio Tinto manages 15 mines, 43 trains and four ports some 1,500 km from the West Australian capital.
By this time last year the robot army deployed in the Pilbara region of Western Australia had already moved 200 million tonnes and traveled nearly 4 million kilometers.
Rio is also looking at autonomous drills and after spending $520 million on the project Rio said trains should also become remotely controlled this year.