Rio Tinto Boosts Iron Ore Production as Copper Set to Jump

(Bloomberg) — Rio Tinto Group, the world’s top iron ore producer, said fourth-quarter shipments of the steelmaking material rose 4% as it sees higher-than-expected copper production in the year ahead.

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The London-based miner produced 87.3 million tons of iron ore in the three months to Dec. 31, beating an average analysts’ estimate of 86.2 million. Rio Tinto kept its 2023 output guidance largely unchanged except for copper, with its purchase of Turquoise Hill Resources Ltd. expected to rapidly bolster output.

“The acquisition of Turquoise Hill Resources strengthens our copper portfolio and demonstrates our ability to allocate capital with discipline to grow in materials the world needs for the energy transition and delivering long-term value for our shareholders,” Chief Executive Officer Jakob Stausholm said Tuesday in a regulatory filing in Sydney Tuesday.

The increased output would come at an opportune time, with Goldman Sachs Group Inc. seeing a “bullish concoction” for commodities on the back of rebounding demand in China and insufficient investment in supply. However, Rio on Tuesday warned that soaring Covid cases in its biggest market will lead to “high volatility in the coming quarter, with increased short-term risks of supply chain disruptions and labor shortages.”

The company increased its copper output guidance to 650,000 to 710,000 tons, up from an estimate of 500,000 to 575,000 made last year, with commercial production expected to ramp up at Turquoise Hill’s vast underground mine in Mongolia, Oyu Tolgoi.

While global supply chain pressures have eased, the war in Ukraine remained a threat to global food and energy security, Rio said. The company will report its full-year financial results on Feb. 16.

Other production highlights for Rio Tinto’s fourth quarter:

Mined copper output 131,300 tons y/y; est. 138,992
Bauxite production 13.2 million tons, +0.8% y/y, estimate 13.9 million
Alumina production 1.94 million tons, +1.6% y/y, estimate 2 million
Aluminum production 783,000 tons, +3.4% y/y, estimate 777,059
Pilbara iron ore shipments forecast for 2023 unchanged at 320 million to 335 million tons

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