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Rio Tinto iron ore production on the rebound

Analysts at Credit Suisse said production volumes rallied “where it mattered” in Pilbara, the industrial miner's most important asset

Rio Tinto plc - Pilbara

Rio Tinto plc’s (LON:RIO) kept iron ore production on track in the third quarter as investors look ahead to the miner’s strategy day at the end of the month.

The FTSE 100 miner reported that the Pilbara mine in Western Australia, which generates about half of Rio’s total revenues, produced 87.3mln tonnes of mined iron ore in the third quarter, up 6% on last year.

Sales also rose 5% to 86.1mln from last year, translating to 1% growth on the previous quarter.

The numbers signal a potential recovery from the “operational challenges” Rio faced at Pilbara this year, having downgraded production estimates twice, first when a cyclone hit in April and again in June when it produced too much low-grade material.

Guidance for the full year’s iron ore production was unchanged, but Rio revised down its aluminium production and bauxite estimate.

The mining giant also said it has begun preparatory work on a new Koodaideri mine in Pilbara which is expected to generate 43mln tonnes of iron ore annually after its first production in 2021.

Analysts at Credit Suisse said that there were “no major misses or beats” since production volumes rallied “where it mattered”, in iron ore, but said that its capital markets day on 31 October should give a clearer outlook on iron operations.

Rio shares, which have trended down this year due to a bearish iron ore market and weakening Chinese demand, dipped 2% to 2,945p in early trading on Wednesday.

Quick facts: Rio Tinto plc

Price: 4426 GBX

LSE:RIO
Market: LSE
Market Cap: £74.45 billion
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