Friday 17 January 2020 7:28 am

Rio Tinto blames the weatherman as iron ore shipments slip

Rio Tinto posted a quarter-on-quarter climb in iron ore shipments for the end of 2019, when they hit 86.8m tonnes in the fourth quarter.

That represented a one per cent rise on the third quarter despite a four per cent drop in production to 83.6m tonnes.

But over the full year, production and shipment figures fell compared to 2018.

Iron ore shipments hit 327.4m tonnes and production hit 326.7m tonnes, leaving both around three per cent down year on year.

Although up on the previous quarter, iron ore shipments were also down one per cent compared to the same period in 2018.

Rio Tinto blamed bad weather and operational challenges in the first half of 2019 for the fall.

The company added that the decline was also affected by “our active decision to protect the quality of the Pilbara Blend”.

However, investors responded positively, sending Rio Tinto’s share price up 1.8 per cent in early trading.

Chief executive Jean-Sebastien Jacques said: “We finished the year with good momentum, particularly in our Pilbara iron ore operations and in bauxite, despite having experienced some operational challenges in 2019. We are increasing our investment, with $2.25bn (£1.72bn) of high-return projects in iron ore and copper approved in the fourth quarter. We also boosted our exploration and evaluation expenditure to $624m n 2019, further strengthening our pipeline of opportunities.

“We have the platform and performance to maintain our delivery of superior returns to shareholders over the short, medium and long-term, driven by our strong value over volume approach and ongoing disciplined allocation of capital.”

Rio Tinto predicted higher pilbara iron ore shipments in 2020, guiding to between 330m and 343m tonnes.

But it included the caveat: “Our guidance is framed by expectations of general stability in global GDP growth in 2020, tempered by negative risks, including geopolitical tensions and oil price volatility.”

“Our increased focus on waste material movement and pit development will continue in 2020 to improve mine performance and pit sequencing,” the firm added.

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