Rio Tinto Limited (AU:RIO) fell by over 2% as of writing after it released a production update. Investors were concerned that the iron ore shipments of 80.3Mt (million tonnes) in Q2 fell short of consensus expectations of 82Mt. However, the shipments still marked an increase of 3% as compared to the previous quarter.
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Meanwhile, the company’s iron ore production increased by 2% to 79.5 Mt in the second quarter, compared to the previous quarter.
More Details from Rio Tinto’s Production Update
Overall, iron ore shipments reached 158.3Mt in the first half of 2024, marking a 2% decline compared to the same period last year. The company reported that production and shipping were disrupted by a train collision in mid-May, leading to around six days of lost rail capacity.
For FY24, Rio Tinto has maintained its previous iron ore shipment forecast, expecting to ship between 323Mt and 338Mt.
Additionally, aluminium production remained flat quarter-on-quarter at 824kt (thousands of tonnes) but increased by 3% for the half-year to 1,650kt. Copper production rose by 10% from the first quarter to 171kt, and by 13% for the first half, reaching 327kt.
Greenlight for Simandou Iron Ore Project
The company also announced that it has received all the final approvals to develop the Simandou high-grade iron ore deposit in Guinea, West Africa.
The company is partnering with a Chinese consortium led by Aluminum Corp. of China on the Simandou project and plans to invest $6.2 billion. This investment will cover the development of crucial port and rail infrastructure necessary for exporting iron ore. Upon completion, the Simandou project will be the largest integrated mining and infrastructure investment in Africa.
Is Rio Tinto a Buy or Sell?
According to TipRanks, RIO stock has received a Moderate Buy rating based on a total of 11 recommendations, of which six are Buys. The RIO share price forecast is AU$140.37, which is 20% above the current trading level.
