Rio Tinto cuts copper production guidance, posts record iron ore shipments

Rio Tinto reported record first-quarter iron ore shipments from its Plibara operations in Western Australia as China ramped up steel production, but cut copper output guidance due to issues at its US Kennecott and Chilean Escondida operations.

Iron ore shipments rose 16% to 82.5 million tonnes of the steel-making material, beating a prior first-quarter record of 80.3 million tonnes set in 2018.

However, copper production was downgraded after snowfall and a broken conveyor belt at Kennecott led to a 36% fall in output. Rio said this would impact operations until the third quarter and lowered its mined copper guidance for 2023 to 590,000 - 640,000 tonnes, from 650,000 - 710,000 thousand tonnes.

During the quarter mined copper production at Escondida was impacted compared to plan by geotechnical challenges in the open pit.

The mining giant said strong labour markets and spending in the US and falling gas prices in Europe were supporting their economies, but it highlighted an uncertain future as interest rate rises and the banking crisis bite.

“Given the lag effect of tighter monetary policy (in the US), the risk of a recession later this year remains as consumer spending will likely be constrained by rising interest rates and depleted savings. The eurozone economy continues to be challenged by weak manufacturing activities and high core inflation,” the company said on Thursday.

Reporting by Frank Prenesti for Sharecast.com