Rio Tinto Limited (ASX: RIO) today downgraded its 2019 guidance for Pilbara iron ore shipments to the range of between 338 and 350 million tonnes due to the disruption caused by Tropical Cyclone Veronica in March, combined with the impact of the fire at Cape Lambert A in January. The revised guidance is in comparison to the previously stated guidance range of 338 and 350 million tonnes.
However, Rio Tinto’s Pilbara unit cost guidance remains the same at $13-$14 per tonne.
For the quarter ended 31 March 2019, the company reported production from Pilbara of 76.0 million tonnes, 9% lower than the same period in 2018. The reduction reflects the ongoing disruption to shipments caused by adverse weather including the damage to the port facilities due to the cyclone.
Pilbara iron ore shipments were 69.1 million tonnes, 14% lower than the first quarter of 2018, with approximately 33% of sales been made free on board (FOB) during the quarter. Further, the Group has commenced site construction work after receiving the approval of the $2.6 billion investment in the Koodaideri replacement mine.
Rio successfully completed the Amrun bauxite mine in March 2019 with the delivery of project ahead of schedule. The Bauxite production reached to 12.8 million tonnes during the quarter, 1% higher than the previous corresponding period despite the adverse weather conditions throughout the quarter reflecting the impact on production at the Weipa, Amrun and Gove mines. Rio Tinto expects its bauxite production to be within 56 and 59 million tonnes in 2019.
The Group further reported aluminium production of 0.8 million tonnes, similar to the March 2018 quarter production. There has been marginal growth of 1% in aluminium production excluding the non-managed Becancour smelter, which was impacted by a lock-out. For 2019, Rio has placed its production guidance for aluminium to the range of between 3.2 and 3.4 million tonnes and alumina to 8.1 to 8.4 million tonnes.
With respect to the copper segment, Rio reported the Mined copper production of 52.5k tonne at Rio Tinto Kennecott, reflecting 48% growth compared to the previous corresponding period. The growth reportedly demonstrates the result of mining activity continued in a higher grade area of the pit along with increased throughput and productivity improvements.
However, refined copper production reduced by 16% to a 29.6k tonne, primarily due to a planned anode shutdown at the smelter in February. Rio expects to produce refined copper between 220 and 250k tonnes in 2019 with mined copper production guidance placed to the range of between 550 and 600k tonnes.
In diamond business, Rio recovered lower production at Argyle and Diavik due to the lower recovered grades in the first quarter of 2019. As a result, carats production reduced by 22% at Argyle and 5% at Diavik compared to the previous corresponding period.
In today’s trading session, RIO stock price edged up by 0.447% to last trade at $101.200 on 16 April 2019. The stock closed at a price to earnings multiple of 8.960 x with a market capitalisation of $37.4 billion.