Extreme weather hits Rio Tinto's iron ore shipments in Q1

(Sharecast News) - Diversified mining group Rio Tinto expects iron ore shipments at its Pilbara operation in Western Australia to be at the lower end of guidance due to losses as a result of extreme weather in the first quarter. Production from Pilbara totalled 69.8m tonnes in the first quarter, down 19% over the three-month period and 10% lower than the year before.

Pilbara shipments totalled 70.7m tonnes, down 17% quarter-on-quarter and 9% lower year-on-year, representing the weaker first quarter for iron ore shipments in six years.

Around 13m tonnes of shipments were lost due to disruptions and damage caused by four cyclones during the first quarter. Rio said the mitigation plans are now in place to offset around half of this, but it will require an additional investment of A$150m (£72m) for rectification works and contracting mining activities.

As a result, the company expects full-year iron ore shipments to be at the lower end of the current guidance range of 323m-338m tonnes.

"Pilbara iron ore guidance remains subject to the timing of approvals for planned mining areas and heritage clearances. The system has limited ability to mitigate further losses from weather if incurred," it said.

All other guidance for Rio's other commodity groups was left unchanged after what it called a "solid performance" in the first quarter, while growth projects are said to be moving ahead with pace.

"We are making excellent progress with our major projects to deliver profitable organic growth. We achieved first iron ore at Western Range in the Pilbara and the Simandou high-grade iron ore project in Guinea remains on track. After successful completion of the Arcadium acquisition in March, we are advancing to establish a world-class lithium business," said chief executive Jakob Stausholm.

Rio Tinto's share price dipped 1% to 4,308.5p in early deals on Wednesday.