Mining giant Rio Tinto announced that its iron ore production volume for the quarter declined by 2% year-on-year to 76.4 million tonnes, buoyed by above-average rainfall across Western Australia, labour shortages, and tropical cyclone Seroja. However, the company increased its shipments of iron ore by 7% during the March quarter.
Production volume declines by 2%
The miner reported that the wet weather and labour shortages affected its mine and port operations in Western Australia, resulting in a 2% decline in its quarterly production volume to 76.4 million tonnes. The company added that during April, the operations were disrupted following Tropical Cyclone Seroja.
Shipments rise by 7%
Rio Tinto lifted its shipments of iron ore during the March quarter by 7%, from 72.9 million tonnes last year to 77.8 million tonnes. This surge was driven by robust demand due to Chinese industrial activity and a rebound in global economic growth. China’s construction activity and steel demand in the first quarter eclipsed 2020 and 2019 levels.
Rio also took advantage of the strong demand for its higher quality Pilbara blend products due to solid margins at China steelmakers. China’s renewed focus on cutting steelmaking emissions is anticipated to restrain steel exports in 2021, supporting margins globally.
Copper production declines
Rio Tinto owns 30% of Chile’s Escondida. The copper production plunged by 16% compared to last year after COVID-19 prevention measures limited labour availability in Escondida in Chile. Meanwhile, copper shipments from Rio Tinto’s Oyu Tolgoi copper mine in Mongolia were impacted by Chinese boarder restrictions due to increased cases of COVID-19.
The miner commented: “We declared force majeure on shipments from 30 March and continue to work closely with authorities and our customers to manage the risk of supply chain disruptions. Rio has resumed cross-border concentrate shipments into China on 15 April however, the situation is very fluid with the COVID-19 resurgence in Mongolia.”
