Rio Tinto’s iron ore output cut by weather conditions

About the company

Rio Tinto is a British-Australian multinational, and one of world’s largest metal and mining corporations. Rio Tinto(RIO.AX) (RIO.L) on Thursday said first-quarter iron production from Australia fell 3 percent. In comparison with the same period a year ago. Mostly due to wet weather at its mines. Heavy rain ruined Rio’s outputs. Despite weakening ore prices it kept its full-year guidance intact.

Pilbara

The Pilbara is a large, dry, thinly populated region in the north of Western Australia. Also It is known for its Aboriginal peoples. Furthermore, having ancient landscapes, the red earth, its vast mineral deposits, in particular iron ore. Pilbara mines output totaled 77.2 million tonnes, the company said. Full-year shipping guidance was kept at 330 million-340 million tonnes.

Shipments from Australia

Shipments from the Australian mines in the first quarter were flat at 76.7 million tonnes against the year-ago period, but down 13 percent from the previous quarter.

Ship loading was impacted by a cyclone, with parts of its rail line hit by heavy rainfall.

“Despite these disruptions, shipments were in line with the first quarter of 2016 and guidance for 2017 remains at 330 to 340 million tonnes,” the company said.

Iron ore producers are facing a promptly cut down of the iron ore prices. Rio Tinto and rivals Vale (VALE5.SA), BHP Billiton (BHP.AX) (BLT.L) and Fortescue Metals Group (FMG.AX) . It is happening amid waning demand from China, the biggest market for ore.

China imported 90.3 million tonnes of iron ore in March this year. China has the biggest appetite for iron ore and also the biggest market.

The worldwide iron ore surplus reached 70 million tonnes last year – more than total U.S. consumption last year – and could balloon to 90 million tonnes in 2017, according to Citigroup.

Iron ore prices are down more than 33 percent since a mid-February peak of $94.86 a tonne and forecasters are warning of a further pullback. (Reuters)

Iron ore prices would backtrack to U$55 a tonne in the fourth quarter. Australia’s Department of Industry, Innovation and Science predicted. Next year’s forecast calls for iron ore prices to reach $51.60 a tonne at the end of the year.

Other minerals

In other minerals, Rio Tinto stuck to a full-year target of producing between 3.5 million 3.7 million tonnes of aluminum following a 2 percent rise in first-quarter production.

Mined copper guidance was subdued to 500,000-550,000 tonnes from as much as 665,000 tonnes as a result of a strike at the Escondida mine in Chile. And the curtailment of production at the Grasberg mine in Indonesia. While Chile is the world’s biggest copper producer, and sales of the metal make up for about 60% its export earnings. In Escondida mine strike, workers gave up because they asked for different conditions.

In conclusion, refined copper production guidance remains unchanged at 185,000 to 225,000 Rio said.