Rio Tinto downgrades iron ore forecasts after storms batter Western Australia
London-listed miner Rio Tinto has downgraded its iron ore guidance after a tropical cyclone battered Australian ports.
Shipments of iron ore from the Pilbara region of Western Australia fell 14 per cent year-on-year in the first quarter of 2019 to 69.1m tonnes.
Read more: Rio Tinto invests $302m in US copper project
Meanwhile, they were down 21 per cent on the final quarter of last year. Production fared a little better, dropping nine per cent to 76m tonnes.
The firm runs 16 iron ore mines in the region, has operations at four port terminals and connects its sites through a 1,000 mile rail network.
They were battered by Tropical Cyclone Veronica in March, but also impacted by a major fire on a conveyor belt at the Cape Lambert export terminal.
Today's announcement came two weeks after the firm said it was expecting to take a 14m tonne hit to production from the weather. It has now revised its production guidance for 2019 to between 333m and 343m tonnes, from 338m to 350m tonnes.
It said second-quarter recovery is still dependent on the weather.
Shares were down 0.1 per cent this afternoon to 4,698p.
Rio Tinto chief executive Jean-Sébastien Jacques said: “Our iron ore business faced several challenges at the start of this year, particularly from tropical cyclones.
Read more: Rio Tinto subsidiary throws $500m at new mine to keep production flowing
“The quarterly operational performance in our other products was solid, generally higher than last year. Our focus remains on safety, delivering our ‘value over volume’ strategy and allocating capital with discipline, to continue delivering superior returns to our shareholders in the short, medium and long term.”
Rio’s report comes amid a backdrop of rising global prices after the world's largest iron miner Vale was forced to scale back production when one of its dams burst, likely killing 300 people.