Rio Tinto on Thursday reported a 4.7% jump in second-quarter iron ore shipments as deliveries from its flagship Gudai-Dari project in Australia’s Pilbara region overcome the problems of adverse weather conditions and labor shortages.
The world’s largest iron ore producer shipped 79.9 million tonnes of the steel commodity in the three months to June 30, up from 76.3 million tonnes a year ago. The performance was slightly below RBC’s estimate of 80.2 million tonnes and UBS’s estimate of 80 million.
Rio Tinto kept its full-year iron ore shipment guidance unchanged at between 320 million and 335 million tons, as it expects its newly opened Gudai-Dari mine to continue to grow production and reach full capacity by 2023 .
“As Gudai-Dari continues to grow, we expect increased production volumes and an improved product mix in the second half,” Rio said in a statement.
The results come as Rio grapples with inflationary pressures and the risk of weak iron ore demand from China, the largest consumer. The country’s efforts to balance its zero COVID strategy and economic growth are weighing on iron ore prices.
The company is facing labor shortages in resource-rich Western Australia and has warned that rising inflation will hit its underlying earnings in the second half.