Poor weather to blame for Rio Tinto's (ASX:RIO) lower Q2 output

Company News

by Melissa Darmawan

Problem-plagued Pilbara continues to pressure the nation’s second largest mining giant, Rio Tinto (ASX:RIO) with iron ore shipments plummeting 12 per cent to 76.3 million tonnes in the June quarter compared to the same time in 2020.

Output from its Pilbara mines fell 8 per cent in the same period to 75.9 million tonnes.

The $48.7 billion miner said that bad weather is to blame along with replacement mine tie-ins. The Covid-19 pandemic was also another reason why as the miner found it hard to get skilled hands on deck. Their engagement with the Traditional Owners following blowing up the 46,000 year old Juukan Gorge cave is now an added factor.

Rio said severe wet weather cost the operations around three million tonnes of output in the first half. As the miner bunkered down, the inability to work on maintenance at Western Turner Syncline, Robe Valley, and Yandicoogina mines estimated to be 4 million tonnes loss in the half year.

The mining player flagged production risks to continue in the second half as they wrestle with the timeline to deliver the Gudai-Darri mine on time. The miner admits that they are struggling to find experienced and specific skillset recruits in Western Australia to join the team. 

Rio said it expected iron ore shipments would be at the lower end of its guidance range while copper is expected to be slower due to the size distribution of the material.

With the miner lagging in their first half against annual production guidance of 325 to 340 million tonnes for the full year versus 154 million tonnes for the six months, Rio chief Jakob Stausholm acknowledges challenges lie ahead.

Shares in Rio Tinto (ASX:RIO) are trading 1.2 per cent lower at $129.55.

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