Rio Tinto shares fall on 'disappointing' Q3 production
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More news: Rio Tinto shares lowered on the ASX after the mining giant's September production report failed to impress analysts.
Rio shares were down 1.7% to $119.98 by 11:20am AEDT.
Citi analysts noted that Rio's "disappointing" production report compounded recent criticism by investors for offering an "unnecessarily full price" to Arcadium shareholders through its acquisition of the lithium producer.
They noted that while Rio's core Pilbara operations are performing well, the miner has raised its operating expenditure guidance to the upper half of unchanged guidance given persistent inflation.
RBC Capital Markets analyst Kaan Peker described Rio's result as "mixed". While iron ore shipments from the miner's Pilbara operations were better than expected, copper and aluminium marginally missed estimates, he said.
What they said: "The key concern for us in today's result is the "review" of the Pilbara's future product strategy [...] this could see medium to longer-term realisation impacted," Peker said.
"Also, at Kennecott, mine access issues are expected to impact CY25 and CY26 output," he said. "The later two concerns will likely weigh on the stock today."
Rio Tinto lifts Q3 iron ore output, reiterates FY guidance
The news: Rio Tinto has reiterated its full-year iron ore production guidance, after lifting output in the September quarter.
The numbers: Rio’s flagship iron ore division shipped 84.5 million tonnes (Mt) of ore in the three months to 30 September, marking a 1% increase on the same period last year.
Rio's bauxite production grew 8% year on year to 15.1 Mt, while titanium dioxide slag output rose 7% to 263 Mt.
However, production of aluminium (-2%) and mined copper (-1%) both fell, as did output of iron ore pellets and concentrate (-11%) from Rio's co-owned Iron Ore Company of Canada (IOC).
The miner said it remains on track to meet its full-year target of shipping between 323 Mt and 338 Mt of iron ore from its Pilbara operations in the year to 31 December.
The only change to Rio’s guidance was a reduction in IOC production targets, revised down to 9.1 Mt to 9.6 Mt from the previous 9.8 Mt to 11.5 Mt range, following an 11-day site-wide shutdown due to forest fires in July.
The context: Rio CEO Jakob Stausholm said the company is on track for first production from its Simandou iron ore project next year, and first lithium from its Roncon starter plant by the end of this year. Meanwhile, a ramp-up of copper production continues at Rio's Oyu Tolgoi underground mine.
Stausholm also noted Rio's recent acquisition of Arcadium Lithium, saying the move increased the miner's exposure to a "high-growth, attractive market at the right point in the cycle."
What they said: "The decarbonisation of our business remains a priority and is progressing well," Stausholm said.
"We took another important step in securing a long-term future for the Boyne Smelter, announcing a partnership with the Queensland Government to support investment in renewable energy projects," he said.
The sources: ASX announcement, RBC Capital Markets research, Citi research
