Iron ore shipments from Rio Tinto Group could rise as much as 5% in 2020 as the producer recovers from operational issues in Australia this year, the exporter says Thursday.
- The No. 2 miner will also have consistent capacity for volumes of about 360m tons a year once a first phase of the new Koodaideri mine is fully commissioned, expected in late 2021, Rio said in a statement ahead of investor presentations in London.
- Rio said guidance for 2019 iron ore shipments remains unchanged at 320m-to- 330m tons, at a cost of $14-15/ton. Operations in Australia have, at times, operated at a run rate of 360m tons, though not on an annual basis.
- The company was forced to trim production in Western Australia earlier this year after falling behind with mine plans. The exporter was producing too much lower-quality iron ore and forced to reduce total volumes. Work to make improvements is on track, CEO Jean-Sebastien Jacques told reporters on a media call.
- Total capital expenditure in 2019 will be lower at $5.5b, with guidance raised to $7b in 2020, Rio said. Guidance for 2021 and 2022 is for expenditure of about $6.5b, Rio said.
- Work to redesign the mine at Oyu Tolgoi is continuing and a final estimate of cost and schedule is still expected to be delivered in the second half of 2020.
- Rio declined 0.4% Thursday in Sydney trading to trim its advance this year to about 16%. That compares to a 5% gain for rival BHP Group. The statement was released after the close of trading.