The Rio Tinto Ltd (ASX: RIO) share price will be on watch this morning.
That's because the mining giant has just handed in its second-quarter report card.
Rio Tinto share price on watch following Q2 update
Here's a summary of its operating performance for the three months ended 30 June compared to the previous quarter:
- Pilbara iron ore shipments down 4% to 79.1Mt
- Pilbara iron ore production up 2% to 81.3Mt
- Bauxite production up 12% to 13.5Mt
- Aluminium production up 4% to 814Kt
- Miner copper flat at 145kt
- Titanium dioxide slag up 6% to 303kt
What happened during the quarter?
For the three months, Rio Tinto's key Pilbara operations delivered a 2% increase in production to 81.3 million tonnes. This reflects Gudai-Darri achieving sustained nameplate capacity during the period.
This led to first-half production of 160.5 million tonnes, which was up 7% over the prior corresponding period.
The miner's iron ore shipments were 79.1 million tonnes for the period, which was down 4% quarter on quarter. This was driven by planned major maintenance at the Dampier port and a train derailment.
However, this couldn't stop iron ore shipments coming in 7% higher year over year at 161.7 million tonnes for the half.
Looking ahead, management expects more of the same for its iron ore operations in the second half. It highlights that continued operational improvements across the Pilbara system and the implementation of the Safe Production System means that full-year shipments are now expected to be in the upper half of the original 320 to 335 million tonne range. Positively, its unit cost guidance remains unchanged.
Things aren't as positive for alumina, refined copper, and iron ore pellets production. Rio Tinto has been forced to downgrade its production guidance for these metals marginally. Copper unit cost guidance has also been increased by 20 US cents per pound to 180 US cents to 200 US cents.
How does this compare to expectations?
According to a note out of Goldman Sachs, its analysts were expecting Rio Tinto to report iron ore shipments of 78.7Mt for the quarter. Whereas the consensus estimate was for shipments of 81.4Mt.
This means Rio Tinto has delivered on Goldman's estimate but fallen short of the market's expectations.
Management commentary
Rio Tinto's Chief Executive, Jakob Stausholm, was pleased with the quarter. He said:
We built further momentum in our Pilbara iron ore business for the quarter, and now expect to deliver shipments in the upper half of our guidance range for the year. The ramp-up of the Oyu Tolgoi underground mine progressed ahead of plan, and we remain on track to more than triple its copper production by the end of the decade.
Production downgrades during the quarter highlight that we still have much more to do elsewhere, as we roll out the Safe Production System to create stability and achieve excellence across our global portfolio.
We continued to take disciplined measures to grow in the materials the world needs for the energy transition, also with investments to expand our low carbon aluminium production and underground copper production at Kennecott.
The Rio Tinto share price is up 22% over the last 12 months.
