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Rio Tinto share price edges higher on coronavirus update

Rio Tinto share price

In morning trade the Rio Tinto Limited (ASX: RIO) share price has edged higher following the release of a coronavirus update.

At the time of writing the mining giant’s shares are up 0.5% to $78.99.

What did Rio Tinto announce?

This morning Rio Tinto announced that as a result of separate actions by the Premier of Quebec and the President of South Africa to contain the spread of COVID-19, it will slow down some of its operations.

According to the release, the Richards Bay Minerals (RBM) operation in South Africa will curtail production. This is in compliance with a directive from the local government. All mining operations at RBM will be halted by midnight on Thursday March 26 for a period of 21 days.

The company advised that it will make arrangements for the furnaces to be put on care and maintenance mode in order to avoid damage to their continuous operations. The resumption of the construction of the Zulti South project will also be delayed.

Management warned that it is too early to speculate on when operations will resume or the impact this will have on its FY 2020 production guidance.

Canadian operation.

Over in Canada, the Premier of Quebec has announced the closure of all nonessential businesses from midnight on March 24 through to April 13.

Management advised that it understands that the Quebec government has designated industrial complexes including the aluminium sector and the mining industry as essential industries, but has instructed that they must reduce their business activity to the minimum.

Rio Tinto intends to work with the government to comply with its directive. Once again, it is too early to provide an update on the impact this will have on its operations or production guidance. The company will report this to the market in due course.

Rio Tinto’s chief executive officer, J-S Jacques, said: “The health and safety of our people is Rio Tinto’s key priority and we are supportive of the action being taken by various governments to address the threat of COVID-19. We will continue to work with our employees, customers, communities and suppliers to minimise any impact of action being taken to reduce the spread of COVID-19.”

Elsewhere in the resources sector, this morning Syrah Resources Ltd (ASX: SYR) announced the closure of its Battery Anode Material Project in Louisiana. This is after the Governor of Louisiana issued a state-wide “Stay at Home Order” to further fight the spread of COVID-19 in the state. Its Balama operation in Mozambique remains operational at this stage.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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 Scott Phillips.

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