The Rio Tinto Ltd (ASX: RIO) share price is pushing higher on Tuesday.
In morning trade, the mining giant's shares are up 0.5% to $113.90.
Why is the Rio Tinto share price rising?
Investors have been buying the miner's shares today in response to an iron ore operations update ahead of an analyst tour of the Pilbara.
According to the release, during the third quarter of FY 2023, Pilbara iron ore shipments totalled 83.9 million tonnes and production was 83.5 million tonnes (on a 100% basis).
In light of this, the miner's shipments guidance (100% basis) remains unchanged for 2023 and is expected to be in the upper half of the 320 million to 335 million tonne range. This has been supported by the Safe Production System, which is on track to deliver a 5 million tonne productivity uplift.
As for costs, its Pilbara unit cost guidance for 2023 remains at US$21 to US$22.5 per wet metric tonne.
Rio Tinto Iron Ore Chief Executive, Simon Trott, commented:
As we head into the fourth quarter of 2023 we are in a strong and stable position. We have systematically improved our operating performance, reset relationships with external stakeholders and established a foundation for the future. We understand our strengths and challenges, and are making good progress as we continue to reflect and learn.
One negative that could be holding back the Rio Tinto share price is the quality of its iron ore.
Management revealed that its shipments guidance includes 45 million to 50 million tonnes of SP10 product. This represents 13% to 15% of total tonnes, which compares to its guidance of up to 10%.
SP10 is the company's code for low grade iron ore, which commands a lower price.
Management advised that this higher than expected proportion of SP10 product reflects overall production in the upper half of guidance and delayed access to some mine areas.
FY 2024 iron ore guidance
Looking ahead, its shipments guidance has been provided for 2024, with Rio Tinto expecting Pilbara iron ore shipments of 323 million to 338 million tonnes.
Unfortunately, it also advised that SP10 levels are expected to remain elevated for the next few years as it works through the next tranche of mine replacement projects.