The three months to March saw Rio Tinto retain its position as the world’s biggest iron ore miner and shipper with a record performance while its big rivals, BHP and Brazil’s Vale, marked time or lost ground.
It’s not wrong to say that Rio ran away with the seaborne iron ore market in the three months to March, leaving it the only one of the big three miners to catch a surge in Chinese iron ore demand to a record 294 million tonnes.
It would also be fair to say that for various factors BHP – a fatality at Port Hedland and debottlenecking delays and Vale (wet weather and port problems) missed great opportunities to boost shipments into a re-opening Chinese steel industry that wanted as much ore as it could buy.
Chinese domestic production reportedly hit highs, imports from India surged and Rio Tinto seems to have filled the hole left by Vale’s weather-hit performance
Rio’s Pilbara iron ore business produced 79.3 million tonnes and shipped 82.5 million tonnes in the three months to the end of March, up 11% and 16% respectively. It left its guidance for the year steady at 320-335 million tonnes.
BHP said on Friday that it could only manage a flat production performance which saw output of 66.1 tonnes for the quarter. Shipments were also flat at 66.5 million tonnes (on a 100% basis which includes output shares for partners in some mines). That was the weakest first quarter performance in years.
BHP left its 2022-23 (June 30) production guidance steady at 278-290 million tonnes (on a 100% basis) and 246 to 256 million tonnes for its West Australian Iron Ore operations).
Earlier this week, Vale, the big Brazilian miner and exporter this week revealed it produced 66.77 million tonnes of iron ore during the first three months of 2023, up 5.8% from the same quarter in 2022 but down 17.4% from December quarter, 2022 quarter.
Vale said the yearly growth was driven by a stronger operational performance at its S11D mine in northern Brazil (where it miens higher grade ore) and lower rainfall in the state of Minas Gerais state.
Iron ore sales fell 10.6% from the March, 2022 quarter to 45.86 million tonnes but that was a massive 43.5% slide from the December quarter.
Vale blamed the slide in the March quarter sales on port loading restrictions and unscheduled maintenance on port equipment. It said heavy rains impacted its stockpile formation at its mines and ports (meaning it has to cut production because the size of its stockpile was limited by the wet weather).
Vale left its production guidance unchanged at 310 to 320 million tonnes, indicating it sees every chance of making up the lost volumes over the next 9 months.
As far as prices are concerned, all three saw falls from the March, 2022 quarter. Rio said its price averaged a still solid $US125 per tonne in the March 2023 quarter but that was down from $US158 per tonne a year ago.
Vale did worse, its average price was $US108 a tonne, down from $US141 a tonne. BHP didn’t provide price comparisons.
BHP said it didn’t lose any tonnage from Cyclone Ilsa earlier this month.
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Elsewhere at BHP, copper at Escondida in Chile and nickel in WA saw downgrades in 2023 forecasts, while as we have seen above, guidance for iron ore remains unchanged.
Copper’s cut was hinted at by Rio Tinto on Thursday when its production and sales report for the March quarter (Rio said higher share of its big Mongolian mine helped offset the slide from Escondida) showed a flat performance with problems at Escondida blamed.
On Friday, BHP’s production guidance at Escondida was cut to between 1.050 million and 1.080 million tonnes, from 1.080 million to 1.1180 million tonnes.
Full year total copper production guidance was maintained as higher production from other mines offset the problems in the mining pit at Escondida. BHP said output from the Olympic Dam and Papam Norte mines are forecast to be toward the upper end of guidance ranges.
Rio on Thursday referred to these problems as “geotechnical” which sometimes means an unknown fault
But nickel output was cut to between 75,000 and 85,000, from 80,000 to 90,000 tonnes.
BHP Mitsubishi Alliance’s output of premium coking coal from central Queensland is projected at the lower end of forecasts at 58 million tonnes.
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Meanwhile Woodside Energy, the country’s biggest locally owned oil and gas group saw a 16% drop in first quarter revenue, the company told the ASX on Friday.
Like smaller rival Santos, which reported a similar revenue slide on Thursday, Woodside blamed the drop on lower oil and gas prices from the year ago quarter when Russia invaded Ukraine and sent prices soaring.
A small dip in production added to the pain.
Woodside reported sales revenue of $4.3 billion for the three months to March 31 while production volumes slid 9% to 46.8 million barrels of oil equivalent because of planned maintenance activity at onshore and offshore projects.
Woodside actually saw a big rise in revenues and production from a year ago on a nominal basis because the takeover of BHP’s oil and gas assets didn’t take place officially until June last year.
“Our operations teams continued to achieve strong outcomes,” Woodside CEO Meg O’Neill said in the announcement.
“Production was 122 per cent higher than the corresponding quarter last year, demonstrating the significant value generated by the merger with BHP’s petroleum business.”
Woodside’s average LNG price slid from $US20.3 per million British thermal units in the final three months of 2022 to $US16.7 in the March quarter (now less than $US13 a MMBtu in northern Asia). Its average oil price fell from $US82 a barrel to $US76.
