Rio Tinto (ASX:RIO) share price lower on Q2 update

This mining giant didn’t have the best quarter…
The post Rio Tinto (ASX:RIO) share price lower on Q2 update appeared first on The Motley Fool Australia. –

The 力拓集团 (ASX: RIO) share price is dropping on Friday following the release of its second quarter update.

At the time of writing, the mining giant’s shares are down 1% to $130.25.

How did Rio Tinto perform in the second quarter?

As you might have guessed from the Rio Tinto share price performance today, the mining giant had a softer than expected quarter.

According to the release, Pilbara iron ore production came in at 75.9 million tonnes for the three months. This was 9% lower than the prior corresponding period due to above average rainfall in the West Pilbara, shutdowns to enable replacement mines to be tied in, processing plant availability, and cultural heritage management.

Also on the decline were Rio Tinto’s iron ore shipments. They came in at 76.3 million tonnes, which was 12% lower than the second quarter of FY 2020. Ongoing COVID-19 restrictions and a tight labour market have further impacted the company’s ability to access experienced contractors and particular skill sets.

It was a similar story for mined copper production. It fell 13% over the prior corresponding period to 115.5 thousand tonnes. Management advised that this was driven by lower recoveries and throughput at Escondida. This was the result of the prolonged impact of COVID-19 and a planned relocation of the in-pit crusher at Kennecott in April.

Finally, Bauxite production fell 6% to 13.7 million tonnes, aluminium production rose 4% to 0.8 million tonnes, and titanium dioxide slag production increased 14% to 298,000 tonnes.

Iron ore shipments guidance

Also weighing on the Rio Tinto share price is management’s guidance for FY 2021.

It advised that it expects its iron ore shipments to be at the low end of its guidance range. Though, this remains subject to COVID-19 disruptions, the tie-in and ramp up of brownfield replacement mines, and management of cultural heritage.

In addition, Rio Tinto’s Pilbara iron ore FY 2021 unit cost guidance is now US$18 to US$18.50 per tonne. This is up from US$16.70 to US$17.70 per tonne previously. Though, positively, it is still materially lower than the price is commanding. Management advised that Rio Tinto achieved average first half pricing of $154.9 per wet metric tonne on an FOB basis. This is the equivalent to $168.4 per dry metric tonne, at 8% moisture assumption.

Mined copper and bauxite production is also expected to be at the low end of the guidance range. Whereas its full year titanium dioxide slag production guidance has been removed. This is due to risks around the timing of resumption of operations at RBM in South Africa following an escalation in the security situation.

Management commentary

Rio Tinto’s Chief Executive, Jakob Stausholm, appears disappointed with the quarter. He said: “The global economy, in particular China, recovered strongly and we are intensely focused on servicing our customers with as much product as we can. However, we faced some challenges in the first half notably at our Pilbara operations, which were impacted by replacement mine tie-ins and materially higher rainfall.”

“Heightened COVID-19 constraints, which resulted in numerous travel restrictions, added further pressure on the business and limited our ability to access additional people, particularly in Western Australia and Mongolia, in order to deliver operational improvements or maintenance initiatives and accelerate projects,” he added.

Mr Stausholm acknowledged that the company needs to improve operationally so it can deliver superior returns for shareholders.

He explained: “Safety is our first priority and our performance in this area remains robust in challenging conditions. However, as identified shortly after my appointment, operationally we are not where we want to be. Our first half performance has reaffirmed my belief that we have identified the right priorities to strengthen the business: to become the best operator, strive for impeccable ESG credentials, excel in development and secure a strong social licence.”

“We have made initial progress against our priorities, but a large volume of work remains to make Rio Tinto even stronger, so we can continue to deliver superior returns to shareholders, invest in sustaining and growing our portfolio, and make a broader contribution to society,” he concluded.

The Rio Tinto share price is up 13% in 2021.

The post Rio Tinto (ASX:RIO) share price lower on Q2 update appeared first on The Motley Fool Australia.

Should you invest $1,000 in Rio Tinto right now?

Before you consider Rio Tinto, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Rio Tinto wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of May 24th 2021

More reading

Rio Tinto (ASX:RIO) share price within 2% of all-time high
Behind the Nearmap share price surge, upgrades for Rio and BHP. Scott Phillips on Nine’s Late News

Why the Fortescue (ASX:FMG) share price has rallied 6% in the last week
2 high quality ASX dividend shares with very big yields

Are the 10 highest paid ASX 200 CEOs worth their paypackets?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.


移动APP平台,拥有 12 个市场的 50,000 多种全球上市证券(全球市值超过 70%),直接在您的 Android 或 iOS 设备上即可操作。

与独有的交易理念和投资分析工具相结合,帮助您在我们 12 个全球市场中的几乎所有金融工具上找到可操作的见解,从而帮助您优化交易策略。





Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!