Rio Tinto (ASX:RIO) share price higher after Q1 update

The Rio Tinto Limited (ASX:RIO) share price is on the move on Tuesday after releasing its first quarter update this morning…

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The Rio Tinto Limited (ASX: RIO) share price is edging higher following the release of its first quarter update.

At the time of writing, the mining giant’s shares are up 0.5% to $121.45.

How did Rio Tinto perform in the first quarter?

Rio Tinto was a relatively positive performer during the first quarter of FY 2021.

For the three months ended 31 March, the company achieved Pilbara iron ore shipments of 77.8 million tonnes. This was 7% higher than the first quarter of 2020.

However, production was down 2% on the prior corresponding period to 76.4 million tonnes. This was driven by above average wet weather in the mines through February and fixed plant reliability. Labour resource availability and weather challenges also disrupted maintenance.

And while tropical Cyclone Seroja has impacted mine and port operations in April, Rio Tinto’s full year iron ore guidance remains unchanged. As does its Pilbara iron ore 2021 unit cost guidance of $16.7-$17.7 per tonne.

Rio Tinto’s mined copper production came in at 120.5 thousand tonnes, which was 9% lower than the same period last year. This was due to lower recoveries and throughput at Escondida and Kennecott, which was partly offset by higher grades from the Oyu Tolgoi open pit.

The company also advised that its Oyu Tolgoi shipments have been affected by Chinese border restrictions due to increased cases of COVID-19 in Mongolia. It continues to work closely with authorities and its customers to manage the risk of supply chain disruptions.

Elsewhere, bauxite production was down 2%, aluminium production was up 3%, and titanium dioxide slag production was down 5%.

Management commentary

Rio Tinto’s new Chief Executive, Jakob Stausholm, was pleased with the quarter.

He said: “We achieved an overall solid operating performance in the first quarter. We have maintained guidance ranges in all our products, with site teams successfully managing the effects of significant rainfall, in particular at our Australian iron ore assets.”

Mr Stausholm also spoke about the controversies that ultimately led to the exit of former Chief Executive JS Jacques.

He commented: “It has been a period of deep reflection for the company, and I have personally spent a significant amount of time listening, learning and taking actions, in particular to better manage Traditional Owner partnerships and cultural heritage. I have appointed a new leadership team and the transition is progressing well. We have set out clear priorities to develop a stronger Rio Tinto.”

“Our focus is to become the best operator, strive for impeccable ESG credentials, excel in development and secure a strong social licence. This ambition will enable us to continue to deliver superior returns to shareholders, invest in sustaining and growing our portfolio, and make a broader contribution to society,” he concluded.

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