The Rio Tinto Limited (ASX: RIO) share price will be one to watch on Friday.
This follows the release of the mining giant's third quarter update this morning.
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Rio Tinto share price on watch after downgrading guidance
The Rio Tinto share price could come under pressure today after it downgraded its full year guidance following a difficult quarter.
In respect to its performance, below is a summary of what happened during the third quarter:
- Pilbara iron ore shipments of 83.4Mt, up 2% year on year (YoY) and 9% quarter on quarter (QoQ)
- Bauxite production down 3% YoY but up 2% QoQ to 14kt
- Aluminium production of 774kt, which is down 3% YoY and 5% QoQ
- Mined copper came in at 125.2kt, down 3% YoY but up 8% QoQ
- Titanium dioxide slag down 29% YoY and 30% QoQ to 209kt
Guidance downgraded
In light of the above, the company has downgraded its guidance for a number of key commodities.
The key one is its Pilbara iron ore shipments guidance which is now expected to be in the range of 320Mt to 325Mt. This compares to its previous guidance of 325Mt to 340Mt. This follows modest delays to the completion of the new greenfield mine at Gudai-Darri and the Robe Valley brownfield mine replacement project due to the tight labour market in Western Australia.
Elsewhere, its guidance for bauxite production has been trimmed to 54Mt to 55Mt (from 56Mt to 59Mt) and its mined copper production guidance has been reduced to 500kt (from 500 to 550kt).
Management commentary
Rio Tinto's Chief Executive, Jakob Stausholm, commented:
The third quarter has demonstrated the resilience of our people in dealing with ongoing COVID-19 challenges. It has been another difficult quarter operationally and despite improving versus the prior quarter, we recognise the opportunity to raise our performance. We have consequently modestly adjusted our guidance.
We are progressing against our four pillars and striving to make Rio Tinto even stronger, notably to become the best operator. This will ensure we continue to deliver attractive returns to shareholders, invest in sustaining and growing our portfolio, and make a broader contribution to society, particularly in relation to the drive to net-zero carbon emissions.
The Rio Tinto share price is down 13% in 2021.
