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Rio Tinto Trims Iron-Ore Production Amid Driverless-Train Delays

A Rio Tinto iron-ore train in Australia’s Pilbara mining region, 2013.

SYDNEY—As Rio Tinto doubled down on iron-ore mining in the remote northwest corner of Australia, executives envisaged a vast rail network where trains would snake through the Outback and be managed hundreds of miles away in the city of Perth.

But the much-anticipated AutoHaul project, which the Anglo-Australian mining company hoped to have operating last year, hasn’t advanced beyond tests. On Tuesday, Rio Tinto said it now expects to produce less ore next year because of the delay.

Driverless trains hauling ore from 15 mines in Australia’s Pilbara region were aimed at transforming the mining industry. In 2012, Rio Tinto disclosed its plans for the trains to travel roughly 800 miles (1,300 kilometers) of rail to ports where the company loads cargo ships full of the steelmaking commodity destined for customers across Asia. It expected AutoHaul to cost US$518 million but save money by using fewer workers and fuel and giving the company more flexibility on train schedules.

“With the delay in AutoHaul, production from the Pilbara is now expected to be between 330 and 340 million [metric] tons in 2017,” down from a prior estimate of 350 million tons, Rio Tinto said. A spokesman for the company said he couldn’t comment further on the status of the train tests or when they might be completed.

The company, the world’s biggest exporter of iron ore alongside Vale SA VALE 8.92 % of Brazil, didn’t give a forecast for its global output next year. But it said it still expects to ship 350 million tons globally this year, with a small portion made up from its iron-ore business in Canada.

It maintained that projection despite a sharp drop in first-quarter...


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