© Reuters. The Rio Tinto logo is displayed on a visitor’s helmet at a borate mine in Boron, California, USA, on November 15, 2019. REUTERS / Patrick T. Fallon / Files
(Reuters) -Rio Tinto Group lowered its forecast for iron ore shipments for 2021 on Friday as a tighter labor market in Western Australia delayed the completion of a brand-new new mine at Gudai-Darri.
“It has been another difficult quarter from an operational standpoint and … we recognize the opportunity to improve our performance,” said Chief Executive Officer Jakob Stausholm.
The miner now expects shipments of iron ore from the Pilbara for 2021 between 320 million tonnes (mt) and 325 mt, below the lower limit of a previous range of 325 mt to 340 mt.
The downgrade puts Rio on track to lose its place as the world’s largest iron ore producer to Brazilian rival Vale SA.
A tight global supply chain also added to its problems, the company said.
“There are some clear headwinds due to the recent regulatory tightening (in China) and the transition may lead to some volatility in the short term,” Rio added.
Iron ore prices have nearly halved since hitting an all-time high in mid-May, with demand affected by declines in China’s steel production and a sharp slowdown in the country’s real estate activity due to a regulatory crackdown. [IRONORE/]
Still, Rio shipped 83.4 mt of the steel commodity in the three months ended September 30, 2% more than the 82.1 mt shipped last year.
However, iron ore production from the Pilbara was 4% lower, affected by wealth management, abandoned mine replacement linkages and project completion delays.
Rio’s destruction of the 46,000-year-old Juukan Gorge rock shelters last year led to a company leadership review and a national investigation.
In a separate statement Thursday, Rio’s majority-owned Canadian miner Turquoise Hill Resources (NYSE 🙂 said the estimated additional financing required for the Oyu Tolgoi mine in Mongolia had skyrocketed to $ 3.6 billion due to some delays. .
Oyu Tolgoi, 34% owned by the Mongolian government, is one of the world’s largest copper, gold and silver mines, and was at the center of a long-running financing dispute between Rio Tinto (NYSE 🙂 and Turquoise.
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