Rio Tinto to boost 2H Australian iron ore shipments

UK-Australian mining firm Rio Tinto must ship at least 165mn t of iron ore from Western Australia (WA) during July-December, after a derailment disrupted exports in April-June, cutting first half sales to 158mn t.

The firm maintained its WA iron ore shipments guidance of 323mn-338mn t for 2024 on a 100pc basis, despite losing six days of port deliveries because of a derailment in May. It shipped 80.3mn t of iron ore from WA on a 100pc basis during April-June, up from 78mn t for January-March, when cyclone-season weather disrupted exports. It was also up by 2pc from April-June 2023, as productivity gains offset ore depletion.

The target of 165mn-180mn t for July-December is achievable for Rio Tinto, which often boosts shipments in the second half of a calendar and its financial year. It shipped 170.7mn t during July-December 2023 and 161.7mn t for January-June 2023, for a total of 332mn t in 2023.

Low-grade SP10 iron ore made up 17pc of its WA sales during January-June, up from 14pc through 2023, 11pc in 2022 and zero in 2015. The firm warned that SP10 levels are expected to remain elevated until new mining projects are delivered, which is subject to approvals and heritage clearance.

The proportion of the high-grade Pilbara Blend fell to 58pc for January-June from 61pc through 2023, 64pc in 2022 and 73pc in 2015. Rio Tinto is developing higher grade deposits, such as its 40mn t/yr Rhodes Ridge project, to try to reverse the grade decline in WA.

The firm maintained its 2024 cash cost guidance for WA iron ore at $21.75-23.50, while warning this would be the top end of this for January-June because of the lower volumes sold. It achieved an average price of $97.30/wet metric tonne (wmt) fob WA in January-July, down from $98.60/wmt in the same period last year. The equivalent price for January-June 2024 at an 8pc moisture assumption is $105.80/dry metric tonne (dmt) fob WA.

The Argus ICX price for 62pc Fe fines averaged $117.33/dmt cfr Qingdao in January-June, down from $118/dmt in the same period last year.

The Iron Ore Company of Canada (IOC) — in which Rio Tinto owns 59pc — sold 8.65mn t in January-June, up 7pc on the same period last year. It is expected to raise production during July-December with better seasonal conditions to produce as much as 19.5mn t in 2024.

By Jo Clarke