Rio Tinto further cuts 2023 Canadian iron ore targets

Spanish Market: Metals
17/10/23

UK-Australian mining firm Rio Tinto should easily meet the top half of its Western Australian (WA) export target of 320mn-335mn t for 2023, but has again lowered its Canadian guidance.

The firm must ship 82.45mn-89.45mn t of iron ore from WA on a 100pc basis in October-December to hit the top of guidance. It shipped 87.35mn t in October-December 2022. Rio Tinto usually ends its calendar financial year strong, although the cyclone risk increases with the wet season running from November to April in the Pilbara region of WA. The risk of cyclones this year is lower than average, according to the Australian Bureau of Meteorology.

Rio Tinto cut its 2023 equity guidance for Iron Ore Company of Canada (IOC) — in which it holds a 60pc share — to 9.3mn-9.8mn t from the 10mn-11mn t it set in July and from the 10.5mn-11.5mn t set in January, after it produced 7.02mn t in January-September. Extended plant downtime and conveyor belt failures added to the 3½ weeks of lost production in June because of wildfires in Northern Quebec. Shipments could continue to be disrupted through the remainder of the year, as repairs are carried out on the sections of the rail line that were damaged by the fires.

The firm confirmed that its low-grade SP10 product levels in WA would remain elevated for the next few years, as it works through mine replacement options. These include backfill for the Hope Downs joint venture with Hancock, and for the Brockman 4, Greater Namuldi and West Angelas mines, all of which are awaiting environmental and indigenous heritage approvals.

The firm's Chinese portside sales fell to 17.5mn t in January-September from 19.5mn t in the same period of 2022. Around 87pc of the 2023 sales were either screened or blended in Chinese ports.

The firm maintained its Pilbara cash operating cost guidance at $21-22.50/t for 2023, based on an Australian-US dollar exchange rate of 0.70.

The Argus ICX iron ore index was last assessed at $120.05/dry metric tonne (dmt) cfr Qingdao on a 62pc Fe basis on 16 October, up from $104.05/dmt on 16 August, but down from a recent high of $125.55/dmt on 15 September. Argus assessed the 58pc Fe fines price at $109.30/dmt on 16 October, up from $90.95/dmt on 16 August.

By Jo Clarke

Rio Tinto iron ore shipments					mn t
	Jul-Sep '23	Apr-Jun '23	Jul-Sep '22	Jan-Sep '23	Jan-Sep '22

Western Australia (100pc basis)
Pilbara Blend Lump	17.78	17.76	18.86	54.27	48.53
Pilbara Blend Fines	31.01	33.67	38.19	100.03	98.34
Robe Valley Lump	2.45	2.17	2.42	6.60	5.52
Robe Valley Fines	5.11	4.70	4.51	14.07	12.14
Yandicoogina Fines (HIY)	13.67	12.56	13.53	39.92	42.22
SP10 Lump	4.18	1.65	1.65	7.52	9.93
SP10 Fines	9.70	6.61	3.77	23.14	17.61
Total WA iron ore shipments	83.89	79.12	82.92	245.55	234.29
IOC (equity basis)
IOC iron ore shipments	2.30	2.60	2.76	7.02	7.34
Source: Rio Tinto

Iron ore prices ($/dmt)

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