18th Oct 2022 06:19
(Alliance News) - Rio Tinto PLC on Tuesday slightly toned down annual guidance and warned of "downside risks to demand" for commodities on Tuesday.
The miner now expects 2022 Pilbara iron ore shipments in the bottom end of a 320 million to 335 million tonnes range. Shipments of 322 million tonnes were achieved in 2021.
"Our guidance assumes development of the Covid-19 pandemic does not lead to government imposed restrictions and widespread protracted cases, which could result in a significant number of our production and maintenance critical workforce and contractor base being unable to work due to illness and/or isolation requirements. This risk extends to prolonged interruption of service from a key partner or supplier which could lead to severely constrained operational activity of a key asset or project," the company said.
In the third quarter of 2022, Pilbara iron ore shipments fell 1% annually to 82.9 million tonnes. Output climbed 1% to 84.3 million tonnes.
Elsewhere, bauxite and aluminium output each fell 2% year-on-year, while mined copper and titanium dioxide slag production were 10% and 48% higher, respectively.
Looking ahead, it noted commodity prices continued to weaken during the third quarter amid a global economic growth slowdown.
"Commodity prices continued their downward trend during the quarter, and there are further downside risks to demand as the global economy slows. Labour markets are holding up relatively well although consumer confidence has waned. Fears of recession are emerging on the implementation of aggressive interest rate hikes in the US and Europe, while a weak property sector continues to weigh on China's economy. Freight rates are falling amid slowing global trade as global supply chains show signs of improvement," Rio explained.
China's economy has been "challenged" by virus curbs recently, it noted, while the US economy is now showing "more signs of a slowdown".
In addition, the company said it will work with partner Wright Prospecting Pty Ltd to "modernise" the Rhodes Ridge iron ore joint-venture in Western Australia.
"The participants have commenced an order of magnitude study, conducted by Rio Tinto, which will consider the development of an operation before the end of the decade with initial plant capacity of up to 40 million tonnes annually, subject to the receipt of relevant approvals," Rio said.
A resource drilling programme is currently underway to support future studies at the project, which is 50% owned by Rio.
Shares in the company were 0.1% lower at AUD94.07 each in late trade in Sydney on Tuesday.
By Eric Cunha; [email protected]
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