Giant iron ore miner Rio Tinto Limited (ASX: RIO) has cut its guidance for Pilbara iron ore shipments for this financial year – which could see the company miss analysts’ earnings forecasts.

Rio had previously stated that it expected to ship 330 million tonnes of iron ore in 2016, but has lowered that figure to a range of between 325 and 330 million tonnes. After producing 83.2 million tonnes in the third (September) quarter, Rio has now produced 243.9 million tonnes in the first nine months.

The fourth quarter will need to see production of 81.1 million tonnes to reach the bottom end of that target.

Rio also noted that its Silvergrass iron ore mine was approved in August 2016, and will add ten million tonnes by the fourth (December) quarter of 2017. The company is guiding to between 330 and 340 million tonnes of iron ore production in 2017.

Its other commodities aren’t a major money earner, but Rio did increase production of bauxite, aluminium, copper, hard coking coal, semi-soft coking coal, uranium and titanium dioxide slag by 10% or more for each commodity, compared to the September quarter 2015.

Iron ore outlook

Fortescue Metals Group Limited (ASX: FMG) CEO Nev Power today warned that the outlook is for iron ore prices to decline as we head into 2017. That’s despite Chinese domestic production forecast to fall to 180 million tonnes from 260 million tonnes in 2015, as smaller, higher-cost miners exit the market.

New low-cost supplies from Australia and Brazil are likely to fill the void, although one issue is that freight costs have doubled according to Fairfax Media.

BHP Billiton Limited (ASX: BHP) CEO Andrew Mackenzie also noted yesterday that it expects the supply of iron ore and metallurgical coal to grow more quickly than demand in the near term.

Getting back to Rio, the miner also lowered its copper guidance for the full year, as well as diamonds, although it did also increase its share of production of bauxite to 47 million tonnes from 45 million tonnes.

Foolish takeaway

Iron ore continues to be Rio’s primary money spinner, so a cut to forecast production could see revenues and earnings fall. That might see the miner report disappointing results for FY16 in February 2017.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.