Rio cuts iron ore guidance

RIO Tinto has made another cut to its 2019 iron ore guidance.
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Rio's Greater Brockman operations

The company reported it was currently experiencing mine operational challenges, particularly in the Greater Brockman hub in the Pilbara.

The challenges are resulting in a higher proportion of certain lower grade products, partly to protect the quality of Rio's flagship Pilbara Blend, the company said.

Around 1.5 million tonnes of lower grade products were sold in the first quarter, and the company said additional sales will be made during 2019.

In light of the challenges, there has also been a review of mine plans, resulting in guidance of Pilbara shipments for 2019 being revised to between 320 million tonnes and 330 million tonnes, down from 333-343Mt.

Rio said it would update its unit cost guidance of US$13-14 per tonne in its June quarter report, to be released on July 16.

Rio's original 2019 iron ore guidance was 338-350Mt, but that was lowered in April due to a fire and Tropical Cyclone Veronica.

The cuts come with as iron ore trades on five-year highs north of US$110 per tonne.

Having hit a decade high of A$107.99 late last month, Rio shares were down 4.4% to $101.05 in midday trade today.