Rio Tinto Ltd (ASX: RIO) shares are falling on Tuesday.
In morning trade, the mining giant's shares are down 2% to $116.75.
This follows the release of the company's second quarter update.
Rio Tinto shares fall on soft Q2 update
For the three months ended 30 June, Rio Tinto reported iron ore production of 79.5Mt and shipments of 80.3Mt. This represents an increase of 2% and 3%, respectively, over the first quarter.
This took the mining giant's iron ore shipments to 158.3Mt for the half, which is a 2% decline on the prior corresponding period.
Management advised that productivity gains offset ore depletion during the quarter. However, production and shipping were impacted by a train collision in mid-May, which resulted in around six days of lost rail capacity and full stockpiles at some mines.
Elsewhere, aluminium production was flat quarter on quarter at 824kt, but up 3% for the half to 1,650kt. And copper production increased 10% from the first quarter to 171kt and 13% for the first half to 327kt.
How does this compare to expectations?
Goldman Sachs was expecting iron ore shipments of 79Mt for the quarter, whereas the consensus estimate was 82Mt.
With shipments coming in at 80.3Mt, Rio Tinto has outperformed Goldman's estimate but fallen short of the market's expectations.
Unfortunately, the miner's copper production of 171kt has fallen short of estimates. Goldman was forecasting 180kt and the consensus estimate stood at 175kt.
This may explain why Rio Tinto shares are falling today.
Management commentary
Rio Tinto's chief executive, Jakob Stausholm, appeared to be pleased with the quarter. He said:
Our operational performance continues to progress. While there are still significant improvements ahead, we are beginning to see a step-change in production, including from our Queensland bauxite business following the roll-out of the Safe Production System.
Stausholm also revealed that it is full steam ahead for the US$11.6 billion Simandou iron ore project in Guinea, which has been granted approval today. He adds:
We are growing with discipline in the materials the world needs for the energy transition. Construction of the Simandou high grade iron ore project in Guinea is advancing at pace, the ramp up of the Oyu Tolgoi underground is on track and we are set to achieve first production from the Rincon starter plant by the end of the year.
Outlook
Rio Tinto has held firm with its iron ore shipments guidance for FY 2024. It continues to expect shipments in the range of 323Mt to 338Mt.
And while it has retained its copper guidance, it is now expecting this to be at the lower end of its 660kt to 720kt guidance range.
Elsewhere, Bauxite production is expected to be at the top end of its guidance range and aluminium guidance remains unchanged.
