Rio Tinto has said it expects to ship less iron ore in the remainder of 2021 due to a tighter labour market that has resulted in project delays.
The world's largest iron ore producer now expects 2021 Pilbara iron ore shipments at between 320m tonnes and 325m tonnes, down from a previous range of 325m tonnes to 340m tonnes.
It blamed modest delays to the completion of its new greenfield mine at Gudai-Darri and the Robe Valley brownfield mine replacement project.
The downgrade puts Rio Tinto on course to lose its spot as the world's largest iron ore producer to Brazilian rival Vale.
Mining industry leaders say Western Australia's labour shortage has been exacerbated by coronavirus-related travel restrictions reducing mobility between states.
Meanwhile, miners are also having to compete harder for skilled and experienced workers amid a government-backed construction boom on the east coast.
Supply chain troubles
Rio Tinto said a tight global supply chain added to its difficulties, while headwinds from China's regulatory tightening could spark further volatility.
Despite this, Rio Tinto still shipped 83.4m tonnes of iron ore in the three months ended 30 September 2021, 9% higher than the prior quarter and 2% higher than the 82.1m tonnes shipped last year.
Rio Tinto bauxite production of 14m tonnes was 3% lower than the third quarter of 2020 due to equipment reliability issues and overruns on planned shutdowns at Pacific operations, it said.
Rio Tinto chief executive Jakob Stausholm said on Friday that it had been "another difficult quarter operationally and despite improving versus the prior quarter, we recognise the opportunity to raise our performance".
Iron ore prices have nearly halved since hitting a record peak in mid-May, with demand hurt by China's steel output curbs and a sharp slowdown in the country's property activity due to a regulatory crackdown, reported Reuters.
TradeWinds reported in early August that Rio Tinto had doubled the number of LNG-fuelled newcastlemax bulker newbuildings it has chartered from Eastern Pacific Shipping to six.
At the same time, the company is said to be looking to cash in on the sale of three similar vessels booked at a state-owned shipyard in China as newbuilding prices have surged more than 15% in the past five months.
