The world’s biggest iron ore producer flagged looming risks from the war in Ukraine, inflation and COVID lockdowns in China.
Rio Tinto shipped 71.5 million tonnes (mt) of the commodity over the three-months ended 31 March from its base in Western Australia’s Pilbara region, down from 77.8mt compared to the same time period in 2021. This was a decline of 15% on the previous quarter and 8% lower from the year before, according to a company statement.
The Anglo-Australian miner said labour shortages and depletion of existing mines contributed to challenges at its Pilbara operations.
"Production in the first quarter was challenging as expected, re-emphasising a need to lift our operational performance," CEO Jakob Stausholm said on Wednesday. "As the company starts to ramp up its Gudai-Darri project in Western Australia, our iron ore business will have greater production capacity and be better placed to produce additional tons of Pilbara Blend in the second half."
Rio Tinto shares tumbled as much as 3.6% in mid-morning trade on Wednesday in London. Other miners, including Anglo American (AAL.L), Glencore (GLEN.L) and Fresnillo (FRES.L) were also among the biggest fallers on London's bluechip index.
The announcement comes after Rio Tinto had a stellar year for profits as it cashed in on surging iron ore prices and strong demand from China.
The mining giant posted bumper annual results for 2021, with profits surging 72% on 2020, reaching the highest levels in the company's 149-year history as iron ore earnings roughly doubled, reaping annual underlying earnings of $21.4bn (£16.4bn).
Iron ore hit a record of over $230 a tonne in May last year, however, prices have been volatile.
The commodity retreated to the mid $80s in the second half of 2021 as China reined in the output of its steel makers to meet stricter environmental standards. The market has since rallied, touching $150 earlier this year after monetary easing and relaxed climate targets raised confidence in robust Chinese steel output in the coming year.
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