More Rio downgrading
RIO Tinto has again downgraded its iron ore shipment guidance, blaming labour shortages and WA’S skills crisis for the latest problems besetting its once-dominant iron ore division.
Rio shipped 83.4 million tonnes of iron ore in the September quarter, a substantial improvement on the 76.3 million tonnes in the June period.
But the company lowered its annual shipment guidance by 5 million tonnes, saying it now expects to ship 320 to 325 million tonnes of iron ore from
the Pilbara, down from previous expectations of 325 to 340 million tonnes.
Rio blamed the skills crisis in WA for its latest woes in iron ore, saying it was facing “modest” delays to the completion of its Gudai-darri iron ore mine, and replacement projects at existing mines “due to the tight labour market in Western Australia”.
But Pilbara iron ore is not the only one of Rio’s divisions facing problems, with the mining major lowering output expectations at its bauxite, copper, and Canadian iron ore operations – adding to the grim picture of Rio’s operational performance this year.
Production at its Pilbara operations fell 4 per cent compared to the same period in 2020, at 83.4 million tonnes “due to heritage management, brownfield mine replacement tie-ins and project completion delays”.
Rio still has plenty of work to do to reach even its downgraded shipment target, with year-to-date exports of 237.5 million tonnes, meaning it will need to load 82.5 million tonnes on to outgoing bulk carriers in the December quarter to meet its latest annual output guidance.
Rio boss Jakob Stausholm conceded the September period had been another “difficult quarter operationally”.
“Despite improving versus the prior quarter, we recognise the opportunity to raise our performance. We have consequently modestly adjusted our guidance,” he said.
Rio also again shifted the goalposts on its troubled underground copper project in Mongolia, saying it now expected the first output from the multi-billion expansion in early 2023, from previous expectations of first production in October 2022.
The mining major said it now expected copper output from its global portfolio to come in at the very bottom end of its 500,000 to 550,000 tonne previous guidance, slashing refined copper output expectations by 20,000 tonnes – from 210,000 to 250,000 tones to 190,000 to 210,000 tonnes.
Average copper costs are expected to rise as a result.
Bauxite shipments are also expected to come in lower than projections, with Rio stripping 2 million tonnes to the lower end of its guidance, now sitting at 54 to 55 million tonnes.
And its Canadian iron ore mines are now expected to ship a million tonnes less than previous guidance, at 9.5 to 10.5 million tonnes.
Rio shares closed Thursday at $100.51.