State border closures hamper Rio Tinto

MINING giant Rio Tinto is being hit by labour shortages in Australia and has been forced to downgrade its production expectations.

The company said it expects to ship between 320 million and 325 million tonnes of iron ore from its Pilbara operations.

Rio Tinto has 16 iron mines and employs

13,600 people in the area, in Western Australia, north of Perth.

These sites were previously expected to ship “at the low end” of 325 million to 340 million tonnes.

The company said that it had been delayed finishing a new mine and doing up an old one because of a lack of staff in the region because Australian state borders are closed.

“The tight labour market in Western Australia continues to limit our access to labour and we have also experienced delays due to a tight global supply chain,” it said.

Costs at Pilbara are also rising because of freight, diesel and labour rates, as well as the added costs of ensuring staff get vaccinated.

Production in Canada was also hit as a result of problems getting hold of enough staff and equipment, while labour shortages are also hitting Mongolia.

“It has been another difficult quarter operationally and despite improving versus the prior quarter, we recognise the opportunity to raise our performance. We have consequently modestly adjusted our guidance,” said chief executive Jakob Stausholm.

He added: “We are progressing against our four pillars and striving to make Rio Tinto even stronger, notably to become the best operator.

“This will ensure we continue to deliver attractive returns to shareholders, invest in sustaining and growing our portfolio, and make a broader contribution to society, particularly in relation to the drive to net-zero carbon emissions.”

Shares in Rio Tinto finished 73p lower at 5,038p, following the update from the mining giant.