MELBOURNE, Australia--Rio Tinto PLC (RIO) scaled back its export guidance for iron ore after production in the first half of the year was disrupted by wet weather and rail maintenance.
The mining company also lowered its annual production target for steelmaking coking-coal in the wake of Cyclone Debbie, which struck eastern Australia in March and brought heavy rains and flooding, but maintained production guidance for its other commodities, including for copper which was scaled back in April.
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Iron-ore shipments from Australia's west coast are now expected to be about 330 million metric tons in 2017, the bottom of a previous target of up to 340 million for the year, the London-based miner said Tuesday.
Shipments had been impacted by an acceleration of a rail maintenance program following poor weather in the first quarter, Chief Executive Jean-Sebastien Jacques said.
Across Rio Tinto's operations in the remote Pilbara region, shipments declined 6% year-over-year to 77.7 million tons in the three months through June and were down 3% for the first half of 2017. The Anglo-Australian company's share of output from its mines slipped 2% on a year earlier to 65 million metric tons for the quarter and was down by a similar level for the half year.
The result from the Pilbara operations was weaker than expected, although RBC Capital Markets analyst Paul Hissey said he remained confident the company could achieve its revised export guidance even with further rail maintenance planned for the remainder of the year.
Iron ore was the biggest driver of Rio Tinto's earnings last year, helped by a recovery in the price of the steel-making ingredient.
The effects of Cyclone Debbie on Australia's eastern Queensland state continued to restrain hard coking coal production in the second quarter, with pit access at the Hail Creek operation restricted by water, Rio Tinto said. Three-month production of hard coking coal was down 14% on-year to 1.56 million tons and was 17% lower for the half year. Rio Tinto said it now expected coking coal output for the year to be between 7.2 million and 7.8 million tons, against a 7.8 million-8.4 million ton range previously.
Mined copper production rebounded in the second quarter, although it was still down year-on-year, as the jointly-owned Escondida mine in Chile recovered from a 43-day strike. Overall mined copper output was down 6% on the same period last year at 124,700 tons, and down 21% for the first half at 208,900 tons, but Rio Tinto said it continued to expect its share of production from operations would be 500,00-550,000 tons for 2017.
Among Rio Tinto's other commodities, aluminum production for the second quarter was 1% lower on-year at 888,000 tons, but bauxite output was 7% higher at a record 12.87 million tons, and semi-soft and thermal coal production was 7% higher at 5.57 million tons.
Late last month, Rio Tinto again backed an offer from Yancoal Australia Ltd. (YAL.AU) for its Australian coal business, Coal & Allied Industries Ltd., after the China-backed company raised its bid to US$2.69 billion to top a rival offer from Glencore PLC (GLEN.LN). Rio Tinto's shareholders have voted overwhelming to support Yancoal's bid, and the company said it expects the deal to complete by the end of September.
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(END) Dow Jones Newswires
July 17, 2017 21:24 ET (01:24 GMT)