Rio Tinto lifts iron ore shipments but misses market estimates
Mining giant Rio Tinto shipped less Australian iron ore than expected over the June quarter, but says volumes were higher compared to the same time last year despite the impact of operational controls to arrest the spread of coronavirus across its mine sites.
The nation's second largest miner on Friday revealed it had shipped 86.7 million tonnes of the steelmaking commodity iron ore from its operations in Western Australia's Pilbara in the three months to June 30, compared to 85.4 million tonnes a year earlier. Investment bank UBS had expected Rio's Pilbara iron ore shipments to increase 21 per cent for the quarter to 88.1 million tonnes.
Australia's top miners have benefited as prices for iron ore, the nation's top export, have passed $US100 a tonne.
Chief executive Jean-Sebastien Jacques said Rio remained on course to meet its full-year iron ore export targets.
"Our iron ore assets are performing well in a strong pricing environment and we are on track to meet our 2020 iron ore guidance," he said.
"Despite various COVID-19 related challenges, all our assets have continued to operate, with our first priority to protect the health and safety of all our employees and communities."
The production and sales of iron ore, Australia's single largest export commodity, are considered pivotal to the strength of the federal budget and the national economy.
The price of iron or has repeatedly defied predictions that it is overdue for a fall and this year has passed $US100 a tonne on the back of stronger-than-expected demand from Chinese steelmakers as well as weakening output from rival exporters such as Brazil's Vale. Robust iron ore prices have propelled Australia's three biggest miners – BHP, Rio Tinto and Fortescue Metals Group – to bumper profits in recent times.
Iron ore is Rio Tinto's biggest cash generator by far, accounting for nearly 90 per cent of the miner's earnings.
The figures released on Friday come after Rio's iron ore division has been embroiled in controversy after blowing up a culturally significant 46,000-year-old Aboriginal rock shelter site as part of works to enlarge its adjoining Brockman 4 iron ore mine. Although Rio Tinto had the necessary legal approvals, the destruction of the Juukan Gorge site has devastated the area's traditional owners, the Puutu Kunti Kurrama and Pinikura people, who said they had not been aware of Rio's plans, and has prompted a federal government inquiry and an internal board-led review.
Mr Jacques, who has apologised to the traditional owners, on Friday said it remained even more committed to its relationships with communities and was "engaging extensively" with traditional owners around its operations across the country.