Rio Tinto shares drop after muted June quarter
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More news: Shares in Rio Tinto were down 2% to $117.35 after the global miner reported a muted second quarter performance including lower iron ore shipments, and also lowered annual guidance for mined copper and alumina.
RBC Capital Market analysts gave Rio's update a 'negative' sentiment rating and said the lowered guidance would likely weigh on the stock.
What they said: "CY24 guidance updates are likely to lead to consensus earnings per share reductions, with mined copper production guidance now expected to be around the bottom end of the range driven by Kennecott, and alumina production guidance lowered on gas supply issues," RBC said in a note.
Rio Tinto Q2 iron ore output dips, approves Simandou investment
The news: Mining giant Rio Tinto has kept its full year guidance despite a dip in second quarter iron ore production. It has also formally approved development of its share of the giant Simandou iron ore project in Guinea.
The numbers: Iron ore production from its Pilbara operations for the March quarter was 79.5 million tonnes, down 2% from a year ago.
Shipments for the quarter were up 2% to 80.3 million tonnes. Across its other major divisions, aluminium output was up 1% to 824,000 tonnes, bauxite up 9% to 14.9 million tonnes while mined copper output jumped 18% to 171,000 tonnes.
The context: Rio attributed lower iron ore output to ore depletion in the Pilbara as well as a train collision in mid-May. The global miner expects to make up the gap in the second half of the year and has kept its full-year shipments estimate at 323 million to 338 million tonnes. Iron ore typically accounts for more than 80% of Rio's underlying earnings.
Separately, Rio said it approved its share of the development of the Simandou project’s mine, port and rail infrastructure, which will cost about USD6.2 billion ($9.17 billion).
Chinese state-owned companies, including Chinalco, Singapore’s Winning group and the government of Guinea are the other stakeholders in the giant project that will produce about 120 million tonnes of iron ore at full capacity.
The source: ASX announcement
