Mining Giant Rio Tinto Cuts Iron Ore Target Pool, Getty Images

Mining Giant Rio Tinto Cuts Iron Ore Target

Poor weather, including a pair of cyclones in western Australia, reduced capacity for the company, which downgraded its annual forecast by about 10 million tonnes.

SYDNEY — Rio Tinto cut its full-year guidance for iron ore shipments on Thursday after poor weather hit its operations in the first half of the year.

The mining giant said it now expects to ship around 340 million tonnes during the 2015 calendar year after unseasonal weather, including two cyclones, in Western Australia reduced capacity at its Pilbara operations by 7 million tonnes . It had previously forecast annual shipments of around 350 million tonnes .

Despite the downgrade in its annual target, Rio produced 79.7 million tonnes of iron ore in the June quarter, up 12% from the previous three months. Shipments of 81.4 million tonnes were up 12% over the same period, but not as much as anticipated.

Australia is one of the world’s bigger suppliers of iron ore, which is key to making steel, and China is its largest customer.

Miners have faced a see-sawing week with the price of the commodity falling 10% last Thursday before spiking 10% the next day. It is now tracking around the $50 a tonne on mark.

The iron ore price had already been declining in recent months, exacerbated by the world’s four biggest iron ore exporters — Rio, BHP Billiton, Vale and Fortescue — lifting their production levels to maintain their share of exports.

Elsewhere, Rio said hard coking coal production was up 5% to 2.1 million tonnes in the quarter from the previous three months, while semi-soft coking and thermal coal production was down 10% to 5.1 million tonnes . 

Bauxite production rose 2% to almost 10.7 million tonnes , while copper production dropped 7% to 134,000 tonnes due to lower production from its Kennecott mine in Utah.

Copyright Agence France-Presse, 2015

TAGS: Trade
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