Rio cuts iron ore guidance

RIO Tinto has downgraded its 2020 iron ore guidance following Tropical Cyclone Damien earlier this month.
Rio cuts iron ore guidance Rio cuts iron ore guidance Rio cuts iron ore guidance Rio cuts iron ore guidance Rio cuts iron ore guidance

Stockpiles at Rio Tinto's Cape Lambert port

"The cyclone caused infrastructure damage across our entire Pilbara network, including impact to access roads, electrical and communications infrastructure and accommodation," Rio said.

"All mine sites experienced some disruption and will take time to return to normal operations."

Rio has revised down 2020 Pilbara iron ore guidance from 330-343 million tonnes to 324-334Mt.

"Rio Tinto is working with its customers to minimise any disruption in supply," the company said.

BMO Capital Markets said the cut was likely to negatively impact 2020 EBITDA estimate by 3-5%.

"There is a chance, however, that with Vale also reducing Q1 expectations, the reduced supply to the seaborne market could provide some price support," analyst Edward Sterck said.

Rio is yet to report unit cost guidance for iron ore for 2020, but BMO is flagging C1 costs of US$14.20 per tonne this year.

Rio shares opened at A$97.84. The stock peaked at $107.79 last month.

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