Rio Tinto has suffered a eight per cent drop in iron ore shipments, amid supply chain volatility and labour shortages.
Shares in the company plummeted 4.75 per cent on the FTSE 100 – trading at 5,850p at close of play today.
However, the scandal-stricken miner has hiked its production guidance on all fronts for this year, after wrestling with Covid-19 and lingering controversies.
Rio Tinto, which cut ties with Russia last month amid its invasion of Ukraine, expects to dish out around $8bn on its operations this year, according to its first quarter results today.
Meanwhile, the multinational firm has spent $168m on exploration and evaluation in the first three months of the year, some $10m higher than a year prior.
It has also kicked off mining in its Mongolian Oyu Tolgoi mine during the first quarter, which it bought in mid-March for $2.7bn.
Rio Tinto pushes through ‘challenging’ first quarter
Chief executive Jakob Stausholm, who stepped into the position at the beginning of last year as part of a leadership overhaul at the group, said: “Production in the first quarter was challenging as expected, re-emphasising a need to lift our operational performance.
“We released an independent report on our workplace culture and are implementing all 26 recommendations to make positive and lasting changes.”
The review, which was published earlier this year, revealed 21 reports of actual or attempted rape in the past five years alongside widespread bullying and discrimination.
It was commissioned after Rio Tinto destroyed a sacred Aboriginal cave system, which sat on top of around £75m worth of high-grade iron ore.
The cave system, in the Juukan Gorge near Pilbara, had shown signs of continues human occupation for more than 46,000 years, before it was blown up.a
The miner green lit a new chair in December, Dominic Barton, who joined this month, and is the latest member of the C-suite to join the miner after the Juukan Gorge controversy, following the exit of former CEO Jean-Sébastien Jacques and several other executives.
Jamie Maddock, equity research analyst at Quilter Cheviot, suggested the update reflected the challenging market conditions.
He said: “Rio Tinto produced somewhat of a soggy market update that is largely indicative of broader iron ore supply issues globally that could struggle to meet recovering China demand. Those supply issues, coupled with the government’s efforts to stimulate the economy, will also likely result in higher prices despite iron ore prices having already risen 30 per cent in 2022.”
Earlier this year, Rio Tinto unveiled a £12.4bn dividend for its shareholders, the second largest in the history of the London Stock Exchange.