Rio Tinto (ASX:RIO) releases Q2 production results as Pilbara iron ore business builds momentum

Rio Tinto (RIO) has built further momentum within its Pilbara iron ore business in Q2 CY23, with shipments now expected to be in the upper half of the company’s guidance range for the year.

Full-year shipments are expected to be in the upper half of the original 320 to 335 million tonne range.

“The ramp-up of the Oyu Tolgoi underground mine progressed ahead of plan, and we remain on track to more than triple its copper production by the end of the decade,” Rio CEO Jakob Stausholm said.

However, the company reported there were production downgrades during the quarter, which will be addressed by the roll out of a ‘safe production system’ to create stability across multiple projects.

Pilbara iron ore shipments totalled 79.1 million tonnes, one per cent lower than the corresponding period of 2022. Rio announced it reflected the impact of planned maintenance at the Dampier Port and a train derailment.

Rio’s Pilbara operations produced 81.3 million tonnes in Q2, three per cent higher year-on-year (YoY), while bauxite production was five per cent lower YoY, and aluminium was 11 per cent higher YoY.

“We continued to take disciplined measures to grow in the materials the world needs for the energy transition, also with investments to expand our low-carbon aluminium production and underground copper production at Kennecott,” Mr Stausholm added.

“We are taking practical steps and making investments to decarbonise, being the first to convert an open pit mine to renewable diesel at our Boron operations…”

Operating cash flow for the quarter was impacted by lower dividends from Escondida during the first half of 2023, at $0.3 billion, half of what was seen in the first half of 2022.

RIO has reduced the guidance production for 2023 for alumina, copper, and IOC productions, with iron ore shipments and bauxite production guidance subject to weather impacts.

RIO shares were down 0.54 per cent, trading at $116.25 at 2:43 pm AEST.