The Rio Tinto Ltd (ASX: RIO) share price under pressure on Wednesday morning.
At the time of writing, the mining giant's shares are down 2% to $119.51.
This follows the release of the company's third quarter update.
Rio Tinto share price falls on Q3 update
For the three months ended 30 September, Rio Tinto reported Pilbara iron production of 84.1Mt and iron ore shipments of 84.5Mt. The latter represents a 1% increase year on year and a 5% lift over the second quarter.
Things weren't quite as positive for its copper operations, which recorded production of 168kt. This was down 1% year on year and 2% quarter on quarter. This reflects weaker production at Kennecott, which offset growth at Escondida and Oyu Tolgoi. Kennecott is being impacted by highwall movement.
Elsewhere, aluminium production was down 2% on both periods to 809kt and bauxite production was up 8% year on year and 3% quarter on quarter. Rio Tinto advised that production at its New Zealand Aluminium Smelter (NZAS) was impacted by a call from Meridian Energy Ltd (ASX: MEZ) to reduce its electricity usage by 185 MW from early August.
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 86.2Mt for the three months. This was ahead of the consensus estimate of 85.1Mt.
The broker was also expecting aluminium production 837kt (cons. 830kt) and copper production of 171kt (cons. 176kt).
As you can see above, Rio Tinto has fallen short of all estimates with today's update. This could explain why its share price is under pressure today.
Management commentary
Rio Tinto's chief executive, Jakob Stausholm, appeared to be pleased with the quarter. He said:
We continue to strengthen our operations, with the roll-out of the Safe Production System delivering consistent production at our Pilbara iron ore business and a step change from our Australian bauxite mines. We are building on this, with more work to do across our global portfolio.
We progressed our major projects to deliver profitable organic growth. We are on track for first production from our Simandou high-grade iron ore project next year and first lithium from the Rincon starter plant by the end of this year. Meanwhile the ramp-up of copper production continues at the Oyu Tolgoi underground mine.
Stausholm also spoke briefly on the plan to acquire Arcadium Lithium (ASX: LTM). He adds:
We announced the acquisition of Arcadium Lithium, bringing a world-class lithium business alongside our leading aluminium and copper operations to supply materials needed for the energy transition. This is aligned with our strategy and our disciplined capital allocation framework, increasing our exposure to a high-growth, attractive market at the right point in the cycle.
Our long-term pathway to deliver profitable growth and create shareholder value remains clear, as we progress our business in line with our four objectives.
FY 2024 guidance
Rio Tinto's guidance remains unchanged for FY 2024 other than IOC iron ore pellets and concentrate.
It continues to expect iron ore shipments of 323Mt to 338Mt and mined copper production of 660kt to 720kt. Though, its Pilbara iron ore unit cash costs are expected to be at the upper half of its US$21.75 to US$23.50 per tonne guidance. This is due to inflation being at the higher end of its expectations.
