Rio Tinto maintains production guidance after mixed first quarter

Rio Tinto reported a 7% improvement in Pilbara iron ore shipments year-on-year in the first quarter on Tuesday, to 77.8 million tonnes on a 100% basis.

The FTSE 100 mining giant said production was 2% lower year-on-year at 76.4 million tonnes, however, which was driven by above-average wet weather in the mines through February, and fixed plant reliability.

Labour resource availability and weather challenges disrupted maintenance, the firm said, with Tropical Cyclone Seroja impacting mine and port operations in April.

Its full-year iron ore guidance remained unchanged.

Bauxite production of 13.6 million tonnes was 2% lower than the first quarter of 2020 in the quarter, due to wet weather in eastern Australia.

The port at the Amrun mine closed for 14 days due to large swells and cyclones, although full-year bauxite guidance also remained unchanged.

Aluminium production was 3% higher at 0.8 million tonnes, with the Becancour smelter in Quebec operating at full capacity, and Kitimat in British Columbia nearing the end of its pot relining cycle.

Mined copper production totalled 120,500 tonnes in the first quarter, 9% lower than 2020, with lower recoveries and throughput at Escondida and Kennecott partly offset by the expected higher grade from the Oyu Tolgoi open pit.

Kennecott saw a marginal increase in head grade as it began the transition into higher grades from the south wall ore, with grades expected to gradually increase through 2021.

Oyu Tolgoi shipments were affected by Chinese border restrictions due to increased cases of Covid-19 in Mongolia, with Rio Tinto saying it was working with authorities and customers to manage the risk of supply chain disruptions.

Titanium dioxide slag production was 5% lower year-on-year at 279,000 tonnes, due to a planned furnace rebuild at the Rio Tinto Fer et Titane (RTFT) metallurgical complex in Quebec, resulting in the operation of eight out of nine furnaces.

Production of pellets and concentrate at the Iron Ore Company of Canada (IOC) was 8% lower than 2020 due to the impacts of weather, loading unit availability on mine feed and reduced concentrator mill availability.

There was a fire at one of the two reclaimers at the port on 31 March, although full-year production guidance there remained unchanged.

“We achieved an overall solid operating performance in the first quarter,” said chief executive officer Jakob Stausholm.

“We have maintained guidance ranges in all our products, with site teams successfully managing the effects of significant rainfall, in particular at our Australian iron ore assets.

“It has been a period of deep reflection for the company, and I have personally spent a significant amount of time listening, learning and taking actions, in particular to better manage traditional owner partnerships and cultural heritage.”

Stausholm noted that a new leadership team had been appointed, with the transition said to be progressing well.

“We have set out clear priorities to develop a stronger Rio Tinto.

“Our focus is to become the best operator, strive for impeccable environmental, social and governance (ESG) credentials, excel in development and secure a strong social licence.

“This ambition will enable us to continue to deliver superior returns to shareholders, invest in sustaining and growing our portfolio, and make a broader contribution to society.”

At 0802 BST, shares in Rio Tinto Group were down 0.26% at 6,073p.