Rio Tinto shipped more iron ore in the second quarter of 2022 but warned that uncertainties remain about China’s industrial activity due to the potential for ongoing covid-19 outbreaks.
The world’s largest iron ore producer shipped 79.9m tons between April and June, up 12% on the first quarter and 5% higher than the corresponding period in 2021.
Shipments for the first half of the year were down 2% year-on-year to 151.4m tons.
Rio Tinto attributed the decline to skilled labour supply constraints, Covid-19 disruptions, first quarter delays of mine replacement projects and significantly higher than average rainfall in May.
The company warned that it was currently experiencing “elevated levels” of unplanned absences at its Pilbara operations due to a spike in Covid-19 cases in Western Australia.
Iron ore Platts CFR prices trended downwards to $120 per dry metric ton (dmt) at the end of the second quarter, even though the average prices were just below $140 per dmt year to date.
“The downward pressure was driven by extended Covid-19 restrictions that impacted China’s downstream steel demand to a greater extent than steel production and iron ore consumption,” Rio Tinto said.
The quarter saw the delivery of first ore at Gudai-Darri, Rio Tinto’s first greenfield mine in the Pilbara for over a decade, which it said would increase mine capacity.
Production from the mine will continue to ramp up through the remainder of this year and is expected to reach full capacity during 2023.
The mine’s commissioning and ramp-up is expected to increase Rio Tinto’s iron ore production volumes and improve product mix from the Pilbara in the second half of this year.
However, the miner said full-year shipments guidance for 2022 remains at 320m to 335m tonnes subject to risks around the ramp-up of new mines, weather and management of cultural heritage.
Rio Tinto’s bauxite production of 14.1m tonnes was 3% higher than the second quarter of 2021 due to strong operational performance at Weipa as a result of improved plant reliability.
