Rio Tinto shares lose 1.7% as ore prices grind lower
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More news: Rio Tinto shares were trading 1.7% lower on Tuesday afternoon, as declining iron ore prices outweighed a solid production result under tough conditions.
Iron ore prices have fallen off about 9.6% after reaching their highest levels since April 2022 at the start of the year. Rio is trading roughly 7% lower year-to-date, while fellow iron ore heavyweights BHP and Fortescue are down 7.9% and 8.1% for the year, respectively.
The slide came despite Rio Tinto hitting its full-year guidance targets for iron ore production in spite of a small drop in fourth-quarter output.
Rio Tinto hits iron ore output target despite Q4 dip
The news: Mining giant Rio Tinto has achieved its full-year guidance for iron ore production despite a small drop in fourth quarter output.
The numbers: Full-year iron ore production from its Pilbara operations came in at 331.5 million tonnes, near the top end of the company’s 320 to 335 million tonne guidance. This was in spite of a 2% year-on-year drop in December quarter production to 87.5 million tonnes. Shipments for the quarter were also lower, down 1% to 87.3 million tonnes.
The context: The global miner expects output to increase slightly in 2024, with a full-year shipments estimate of 323-338 million tonnes. Guidance for its Canada iron ore business also improved to a range of 9.8 million tonnes to 11.5 million tonnes. Iron ore typically accounts for more than 80% of Rio's underlying earnings and demand for the steel-making ingredient has remained resilient even in the face of weaker economic growth in key market China. Across its other major divisions, full-year aluminium output was up 9% to 3.3 million tonnes, while mined copper output rose 2% to 620,000 tonnes, thanks to a ramp up at its Oyu Tolgoi mine in Mongolia.
The source: ASX announcement
