Rio Tinto Ltd (ASX: RIO) shares are edging lower on Tuesday morning.
At the time of writing, the mining giant's shares are down 0.5% to $127.61.
Why are Rio Tinto shares falling?
Investors have been selling Rio Tinto shares today in response to the miner's fourth quarter update.
According to the release, the company reported a 3% increase in Pilbara iron ore shipments to 86.3Mt for the fourth quarter. This took its full year shipments to 331.8Mt, which is also a 3% increase over the prior corresponding period.
This was achieved with a second half average realised price of US$109.60 per tonne and a full year average of US$108.40 per tonne.
Management advised that its iron ore operations benefited from improved productivity, supported by ongoing implementation of the safe production system, and the ramp up of Gudai-Darri to its nameplate capacity.
Elsewhere, the company reported quarter on quarter production growth across aluminium, bauxite, titanium dioxide slag, and iron ore pellets and concentrate. The only disappointment was its copper operation which posted a 6% decline in production. Though, that couldn't stop its annual production from increasing 2% year on year.
Looking ahead, no changes have been made to Rio Tinto's FY 2024 guidance.
How does this compare to expectations?
The market was expecting the miner to report Pilbara iron ore shipments of 86.8Mt for the quarter, which represents a 4% quarter on quarter increase. This was expected to be achieved with an average realised price of US$107 per tonne.
While it may have fallen short of the former, it appears to have outperformed the latter based on its second half average.
Management commentary
Rio Tinto's Chief Executive, Jakob Stausholm, was pleased with the quarter and full year. He said:
The Group's total copper equivalent production increased by just over 3% from 2022, reflecting the Gudai-Darri mine in the Pilbara reaching its nameplate capacity and deployment of our Safe Production System. We also benefited from our increased ownership in Oyu Tolgoi as the underground ramps up and the Kitimat aluminium smelter returned to full capacity.
Stausholm also highlights that the company is well placed for the future following the transformation of its portfolio and its exploration plans. He adds:
We made real progress in shaping our portfolio for the future, entering the recycled aluminium market in North America and progressing the world class Simandou iron ore project in Guinea. We have one of the most exciting exploration pipelines in years, including our new copper joint venture with Codelco, launched in December.
There is good demand for the materials we produce, and our purpose and long-term strategy make more sense than ever. The work we are doing today is creating a stronger Rio Tinto for years to come, as we invest in profitable growth while continuing to deliver attractive shareholder returns.
Rio Tinto shares are up 5% over the last 12 months.
