The Rio Tinto Limited (ASX: RIO) share price will be on watch this morning following the release of the mining giant's second quarter update.
How did Rio Tinto perform?
During the second quarter the company reported Pilbara iron ore shipments of 85.4 million tonnes. This was 3% lower than the prior corresponding period due to the impact of recovery works following Tropical Cyclone Veronica.
Pilbara iron ore production fell 7% on the prior corresponding period to 79.7 million tonnes, which also weighed on its copper equivalent production during the period.
According to a note out of Goldman Sachs, it forecast quarterly Pilbara iron ore shipments of 81.6Mt and production of 83.2Mt. This means Rio Tinto has beaten on shipments but fell well short on production.
Mined copper production came in at 137 thousand tonnes, which was 13% lower than the second quarter of 2018. Lower production from Escondida and Kennecott was reflective of lower grades.
Elsewhere, Rio Tinto reported a 1% increase in Bauxite production to 13.4 million tonnes, flat Aluminium production of 0.8 million tonnes, and a 31% lift in titanium dioxide slag production to 303 thousand tonnes.
Rio Tinto chief executive J-S Jacques said: "We saw a challenging operational performance across our portfolio in the first half, while also investing in future growth at Richards Bay Minerals and Resolution. Whilst we experienced operational and weather issues at our iron ore operations in Australia, pricing and market demand has remained robust."
He added: "We remain focused on safely improving and optimising the performance and productivity of our assets in order to drive future cash flow. This, combined with our value over volume strategy and the disciplined allocation of capital, will continue to deliver superior returns to our shareholders in the short, medium and long term."
Guidance.
Rio Tinto's Pilbara shipments in 2019 are still expected to be between 320 and 330 million tonnes in FY 2019, subject to weather.
However, its Pilbara unit cost guidance in 2019 has been revised to $14 – $15 per tonne from $13 – $14 per tonne. This incorporates costs for the additional waste movement in the mines in the second half and the overall reduction in shipments.
