Zhitong Finance learned that Rio Tinto (RIO.US) on Wednesday announced a 1% increase in iron ore shipments in the third quarter, but it was slightly lower than market expectations, as improvements in its Pilbara (Pilbara) business increased production. Iron ore prices remained under pressure for most of the third quarter, and the outlook for demand was bleak. In the three months ending September 30, the world's largest iron ore producer shipped 84.5 million tons of iron ore from its Pilbara (Pilbara) operations, compared to 83.9 million tons in the same period last year; in comparison, analysts' consensus estimate was 84.74 million tons.
Rio Tinto reaffirmed its annual iron ore production guidelines after increasing production in the September quarter. Rio Tinto said that in the year ending December 31, the company is still expected to achieve the annual target of shipping 323 million tons to 338 million tons of iron ore from the Pilbara (Pilbara) business.
Rio Tinto bauxite production increased 8% year on year to 15.1 million tons, and titanium dioxide slag production increased 7% year on year to 263 million tons. However, aluminum production (-2%) and copper mining production (-1%) both declined, as did Rio Tinto's Canadian Iron Ore Company (IOC) iron ore pellets and concentrate production (-11%).
The only change in Rio Tinto's guidelines is the reduction in IOC's production target. After the entire plant was shut down for 11 days due to forest fires in July, the production target was lowered from 9.8 million tons to 11.5 million tons to 9.1 million tons.
Rio Tinto CEO Jakob Stausholm said the company's Simandou iron ore project will be put into operation next year, and the Roncon startup plant will start producing the first batch of lithium by the end of this year. Meanwhile, copper production at Rio Tinto's Oyu Tolgoi (Oyu Tolgoi) underground mine continues to increase.
Rio Tinto recently agreed to buy Arcadium Lithium (ALTM.US) for $6.7 billion, making it the world's third-largest battery metal miner. Stausholm also noted Rio Tinto's recent acquisition of Arcadium Lithium, saying the move increased Rio Tinto's exposure to a “high-growth and attractive market.”
Shipments improved in the second quarter, affected by low port inventories and train collisions. In the three months ending September, Pilbara iron ore production was 84.1 million tons, compared to 83.5 million tons in the same period last year.
The company said that the unit cash cost of Pilbara iron ore this year will be in the upper half of its forecast of $21.75 to $23.50 per ton, reflecting rising inflation expectations.