Rio re-jigs guidance

RIO Tinto has posted a weak quarter of production which culminated in guidance revisions in iron ore and copper.
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Rio's autonomous trucks

Kristie Batten

Pilbara iron ore shipments, on a 100% basis, were 80.9 million tonnes, down 2% on the June quarter.

Shipments for the first nine months of the year were 239.9Mt, up 3% over the same period of 2015.

Port and rail maintenance reduced September quarter shipments, prompting Rio to revise down guidance to 325-330Mt from 330Mt.

“We estimate Rio needed at least 85Mt to stay on track with previous guidance, so the downgrade comes as little surprise,” Morgans analyst Adrian Prendergast said.

“We expect Rio can comfortably achieve 325Mt in the absence of any 4Q weather impacts.”

Mined copper production of 133,300 tonnes was down 4% quarter-on-quarter, though output of 409,900t so far this year was up by 4%.

Copper guidance was revised down to 535,000-565,000t from 545,000-595,000t.

Rio posted higher hard coking coal, semi-soft and thermal coal production for the quarter.

Aluminium output was up 11% for the nine months after Kitimat delivered its second consecutive quarter of nameplate capacity.

Gove and Weipa posted quarterly production records, resulting in a 10% increase in nine-month bauxite production.

The company upped its bauxite production guidance for 2016 by 2Mt to 47Mt.

Rio CEO J-S Jacques said it had been a strong quarter of production.

“Output from our iron ore and bauxite assets reflects the drive for productivity and operational excellence,” he said.

“With a continued focus on value, we will seek further productivity improvements across the business.

“Our rigorous attention to cash generation, coupled with a disciplined allocation of capital remains our key focus in delivering shareholder value.” 

Exploration and evaluation expenditure for the first nine months of the year was $US379 million, with the company active in 17 countries across eight commodities.

Rio shares opened A24c higher at $50.98.