Rio Tinto plc (ADR) (NYSE:RIO) Disappointing Copper Numbers

Rio Tinto plc (ADR) (NYSE:RIO) Disappointing Copper Numbers

Rio Tinto plc (ADR) (NYSE:RIO) Disappointing Copper Numbers

Global miner Rio Tinto on Tuesday said it had lifted its third quarter iron ore shipments by 6 percent after modernizing its haulage railway in Australia’s outback, but cut its production target for copper due to delays at a major mine in Chile.

Iron ore shipments totaled 85.8 million tonnes in the third quarter versus 80.9 million in the same period a year ago, Rio Tinto said. UBS had forecast third-quarter shipments of 84.6 million tonnes.

“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].”

Rio Tinto plc (ADR) (NYSE:RIO) produced 120,600 tonnes of copper in the September quarter, which is lower than expected and just as copper prices hit three-year highs.

There were two reasons offered by the company for the lower copper result.

The first was a seven-week strike at its Escondida copper mine in Chile — co-owned with BHP — which delayed its expansion plans.

The other was a fall in grades at its Kennecott mine in Utah (from 0.47pc to 0.29pc copper).

Rio’s initial guidance was 500,000-550,000 tonnes of copper for the full year. But that was downgraded to 460,000-480,000 tonnes on Tuesday morning.

The miner also said thermal and coking coal production was lower, compared to the previous quarter, because it sold its Coal & Allied operations in the Hunter Valley, NSW, to China-backed Yancoal.

Thermal coal production fell by 23 per cent, while semi-soft coking coal was down 28 per cent (compared to the previous quarter).

Estimates Revisions Summary

Last Week Last 4 Weeks
Number Of Revisions: Up Down Up Down
Revenue
Year Ending Dec-17 0 1 1 1
Year Ending Dec-18 0 1 2 1
Earnings
Year Ending Dec-17 0 1 3 1
Year Ending Dec-18 0 1 3 1
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S. Jack Heffernan Ph.D. Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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