Rio Tinto iron ore shipments as weather, labour shortages hit production

Rio Tinto on Friday reported a 12% fall in quarterly iron ore shipments on Friday after storms and labour shortages hit its Pilbara operations in Western Australia.

Rio said it now expected to ship near the lower end of its range of 325m tonnes (mt) and 340 mt in calendar 2021.

Shipments for the three months to June 30 fell to 76.3 mt. Ongoing Covid-19 restrictions and a tight labour market “further impacted our ability to access experienced contractors and particular skill sets” Rio said.

Pilbara iron ore production of 75.9 mt was 9% lower year on year to above average rainfall in the West Pilbara, shutdowns to enable replacement mines to be tied in, processing plant availability, and “cultural heritage management”.

Rio also raised its full-year iron ore production cost guidance due to increased labour and input costs. Miners have been facing labour shortages as Australia has shut international borders and snap closed state borders during the pandemic.

The miner expects unit costs of $18.00-$18.50 per tonne for the year, up from its previous estimate of $16.70-$17.70 per tonne, even as prices it received for iron ore doubled to $168.40 a dry metric tonne free on board for the first half.

Rio also said it delayed commissioning at its new Gudai-Darri iron ore hub to later this year and first production from its Winu copper find in Australia to 2025 from original estimates of 2023, partly due to Covid restrictions.

It lowered 2021 production by 2 mt due to new strategies to protect Aboriginal areas of high cultural significance as it seeks to repair relations with Aboriginal groups following its destruction of rock shelters at Juukan Gorge last year.