Shares in Rio Tinto hit a more than five year high on Tuesday after the company reported a lift in quarterly shipments from its iron ore operations in Western Australia.
The gain came despite a surprise downgrade of its 2017 copper production estimate after a weak quarter meant its copper assets were not able to full exploit the rebound in the metal.
Rio shares traded up 2% in Sydney at $72, their highest level since August 2011, before easing a little t end up 1.3% at %71.46. They shares are up close to 20% this year (which is more than twice that of the ASX 200, which is up 4.2% in the past few weeks though).
The company reported that its Pilbara iron ore shipments in the third quarter rose 6% from a year ago to 85.8 million tonnes, helped by improved rail capacity. Production of the steel-making ingredient rose 2% to 85 million tonnes in the three months ended September 30.
"The business performed very well in the September quarter, with a strong quarterly production performance and a wave of productivity improvements embedded through our operations," Rio’s chief executive Jean Sebastien Jacques said.
"In particular, we are making good progress with further improvements to our world-class Pilbara iron ore business, including the opening of the Silvergrass mine [in August] and the implementation of AutoHaul [Rio Tinto’s automated train system]."
The strong quarter will help make up for a sluggish first half when bad weather and rail track maintenance work had forced it to lower full-year guidance.
The mining giant has maintained that lower full-year guidance for iron ore shipments of 330 million tonnes, but was forced to cut its guidance for copper for a second time this year.
Rio produced 120,600 tonnes of copper in the September quarter and now expects to produce between 460,000 and 480,000 tonnes of copper for the full year, down from its previous estimate of 500,000 and 550,000 tonnes.
The company said the 3% fall in mined copper production was due to lower copper head grades at Rio Tinto Kennecott and Oyu Tolgoi, while the lowered outlook was partly due to the delayed ramp up of expansion following a strike at its Escondida mine in Chile and mine sequencing changes at the Kennecott mine in Utah for the changes. The weakness at Escondida should show up in the BHP first quarter report due out Wednesday.
The miner also lowered guidance for thermal and coking coal due to the sale of its Coal & Allied operations in NSW to Yancoal during the quarter.
There was no statement on the story (yesterday) that the company is talking about selling is PacAl business in Australia.
