Rio Tinto sees iron ore shipments at low end of guidance, cuts copper target

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Rio Tinto (NYSE:RIO) reported Monday its Q3 iron ore production in the Pilbara region rose 1% Y/Y and 7% Q/Q to 84.3M metric tons, although shipments fell 1% Y/Y while increasing 4% Q/Q to 82.9M tons.

Rio (RIO) said Q3 shipments were disrupted by two unplanned rail outages on the Yandicoogina and Gudai-Darri lines.

The miner expects full-year iron ore shipments will come in at the low end of its original 320M-335M tons guidance range, with final results depending on ramping up its Gudai-Darri and Robe Valley projects, as well as the availability of skilled labor.

Q3 mined copper production rose 10% Y/Y and 9% Q/Q to 138K metric tons, due to higher grades and recoveries at Kennecott.

Rio (RIO) reduced guidance for full-year refined copper production to 190K-220K tons from 230K-290K tons, citing further downside risk associated with Kennecott's smelter and refinery performance, until completion of a major rebuild planned for Q2 2023.

Separately, Rio (RIO) said it will modernize its joint venture with Australia's Wright Prospecting, covering the Rhodes Ridge project in Western Australia's East Pilbara region, home to one of the world's largest and highest quality undeveloped iron ore deposits.

The project's total resource, 6.7B metric tons at an average grade of 61.6% Fe, represents about a third of Rio's (RIO) existing resource base in the Pilbara; a resource drilling program is currently underway to support future project studies.

Iron ore prices are near their lowest in a year after China's President Xi Jinping reiterated his zero-tolerance policy for COVID-19 that has dented steel demand.