- Rio Tinto’s (ASX:RIO) first-quarter iron ore shipments increased by 7 per cent compared to the previous year.
- The iron ore output fell around 2 per cent on labour shortage and weather challenges.
- The 2021 production guidance remains unchanged, with Pilbara iron ore shipments expected at 325-340Mt.
World’s largest iron ore producer, Rio Tinto Limited (ASX:RIO) has unveiled robust first-quarter results for the period ended 31 March 2021. Also, the company’s full-year iron ore guidance remains unchanged.
Source: Company Update, dated 20 April 2021
Robust March Quarter Results:
The miner shipped a record quantity of iron ore in Q1, amid the ongoing strong economic momentum of China, the largest consumer of iron ore globally.
Rio delivered 77.8Mt of iron ore in the March quarter, up 7 per cent from 72.9Mt in the same period a year ago. However, total iron ore production declined by 2 per cent to 76.4Mt due to higher rainfall and labour shortage.
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Rio, just like other iron ore miners - BHP Group (ASX:BHP), Fortescue Metals Group (ASX:FMG), Mineral Resources (ASX:MIN) and BCI Minerals (ASX:BCI) - has recorded bumper earnings, on the back of iron ore price rally.
Huge stimulus packages released to support the economy have been fuelling record-breaking demand for iron ore in China. Supply disruptions in Brazil have also contributed to the price rally.
However, China's interim policies to curb carbon emissions as a part of the country's long-term goal to become carbon neutral by 2060 may have adverse effects on the earnings of iron ore miners.
The miner’s aluminium production for the quarter was higher by 3 per cent to 0.8Mt, with Quebec operations in full swing.
However, bauxite, mined copper, titanium dioxide slag, and iron ore pellets production was down compared to the previous year.
The production of iron ore pallets and bauxite was lower by 8 per cent and 2 per cent, respectively, due to wet weather conditions in Eastern Australia. Mined copper production was down 9 per cent, owing to lower recoveries and throughput at Kennecott and Escondida. Titanium dioxide slag production was 5 per cent lower due to a planned furnace rebuild in Quebec.
Interesting Read: How copper bull run is impacting Rio Tinto’s trajectory
2021 Production Guidance:
The 2021 production guidance remains unchanged, with targeted Pilbara iron ore production expected between 325Mt and 340Mt, subject to weather and market conditions.
In addition, unit cost guidance for Pilbara iron ore remains unchanged at US$16.7-US$17.7 per tonne.
RIO stock traded at A$120.440 on 20 April 2021, down 0.340% from its last closing price.