Rio Tinto 1Q Australian Iron-Ore Shipments Fall -- Update
April 19 2022 - 9:45PM
Dow Jones News
By Rhiannon Hoyle
Rio Tinto PLC said it shipped less iron ore from its Australian
mines in the first quarter of 2022 as it faced challenges
progressing new developments, but stuck to its full-year output
target saying it expects increased production later this year.
The world's second-biggest mining company by market value on
Wednesday said 71.5 million metric tons of iron ore was shipped
from its operations in Australia's remote Pilbara region during the
three months through March. That was down 8.0% year-on-year, and
15% weaker than the quarter immediately prior.
"Production in the first quarter was challenging as expected,
re-emphasizing a need to lift our operational performance," said
Chief Executive Jakob Stausholm.
The delayed ramp up of its Gudai-Darri project--where first
production is forecast for the second quarter of 2022--and
continuing challenges commissioning the Mesa A wet plant slowed the
miner's plan to increase iron ore output at Robe Valley, Rio Tinto
said.
The miner has faced challenges from snarled supply chains and a
tight labor market, which has been exacerbated by rising Covid-19
infections in Western Australia after the state recently eased
strict border controls.
"As we ramp up Gudai-Darri, our iron ore business will have
greater production capacity and be better placed to produce
additional tons of Pilbara Blend in the second half," said Mr.
Stausholm.
Rio Tinto is seeking to ship between 320 million and 335 million
tons of iron ore from Australia this year, compared to 322 million
tons in 2021.
Rio Tinto--which vies with Brazil's Vale SA to be the world's
biggest exporter of iron ore--also has a majority stake in an
iron-ore business in Canada where it expects to produce between 10
million and 11 million tons of iron ore pellets and concentrate
this year. Rio Tinto's share of production from that business
totaled 2.4 million tons in the first-quarter, up 3.0%
year-on-year, it said.
The miner has been benefiting from elevated iron-ore prices,
which have strengthened following Russia's invasion of Ukraine.
"Since late February, supply concerns due to the war in Ukraine
has outweighed muted demand growth and a crackdown on speculative
trading behavior in China," Rio Tinto said.
Commodity prices have been strong generally due to both "actual
and expected disruptions to supply," said the miner, which noted
that recent input cost increases were the largest since the 1973
oil crisis.
The miner also highlighted rising interest rates in many parts
of the world, which it said risked slowing economic growth, a key
driver of commodity demand.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
April 19, 2022 21:30 ET (01:30 GMT)
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