Why July was a great month to own the big three ASX 200 mining shares

Rio Tinto, Fortescue, and BHP shares all smashed the benchmark returns in July. But why?

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The S&P/ASX 200 Index (ASX: XJO) gained a healthy 2.4% in July, with all three of the big ASX 200 mining shares outperforming the benchmark index over the month just past.

Trailing the pack was Rio Tinto Ltd (ASX: RIO). Rio Tinto shares gained 4.3% in July.

Meanwhile, BHP Group Ltd (ASX: BHP) shares closed the month up 6.8%, while Fortescue Ltd (ASX: FMG) shares stormed 16.3% higher.

All three of the ASX 200 mining shares enjoyed tailwinds from a resurgent iron ore price, with the steel-making metal climbing more than 5% over the month to trade above US$100 per tonne.

The Aussie miners also look to be benefiting from a rotation out of ASX 200 bank stocks. This shift is partly being fuelled by concerns that looming RBA interest rate cuts could erode the banks' profit margins.

Investors also received quarterly updates from all three of the big Aussie miners in July.

Here's what we learned.

ASX 200 mining shares report

BHP was the first of the lot to report, releasing its quarterly update on 18 July.

The ASX 200 mining share reported a 2% year-on-year increase in iron ore production to 70.3 million tonnes. Copper production was also up 2% for the quarter to 516,200 tonnes.

Commenting on the miner's performance, BHP CEO Mike Henry said:

BHP delivered record [full year] iron ore and copper production, which demonstrates the strength and resilience of our business and underpins our ability to deliver growth and returns to shareholders amid global volatility and uncertainty.

BHP shares closed up 3.0% on the day.

Fortescue reported its quarterly results the next week, on 24 July.

The ASX 200 mining share caught investor attention after achieving record total iron ore shipments of 55.2 million tonnes over the three months. And Fortescue saw costs come down, with its annual C1 cost declining for the first time (down 1%) since FY 2020.

Fortescue Metals and Operations CEO Dino Otranto said:

Fortescue's performance this year has been exceptional. We delivered record quarterly shipments of 55.2 million tonnes, contributing to a record full year total of 198.4 million tonnes. We met all aspects of our market guidance and cemented our position as the industry's lowest cost producer.

The Fortescue share price closed up 4.3% on the day.

Rounding off the list, Rio Tinto waited to the last day of the month, releasing its half-year results on 31 July.

Rio Tinto underwhelmed with its underlying earnings for the six months, falling 16% year on year to US$4.8 billion. Most of that decline was driven by lower earnings in its Iron Ore division, impacted by weaker iron ore prices and inclement weather.

This saw the ASX 200 mining share slash its fully franked interim dividend by 16% to US$1.48 a share, the lowest interim payout in seven years.

Rio Tinto shares closed down 3.6% on the day.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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