Is the Rio Tinto Limited (ASX: RIO) share price a buy after it gave its third quarter update for September 2019.
Rio Tinto’s origins date back more than 145 years, but today it is one of world’s largest aluminium and iron ore producers, with much of its sales revenue coming from its operates in Western Australia. It also owns, fully or partly, mining projects for copper, diamonds, uranium and other minerals.
Rio Tinto’s Third Quarter September 2019 Production
The giant iron ore miner said that compared to the prior corresponding period of the September 2018 quarter, Pilbara iron ore shipments were up 5% to 86.1mt and production was up 6% to 87.3mt. Against the June 2019 quarter growth was 1% and 10% respectively.
Rio Tinto said there was a good recovery for iron ore from the operational and weather challenges experienced earlier in the year.
Looking at some of the other materials compared to September 2018, bauxite was up 9% to 13.8mt, aluminium was down 3% to 789kt, mined copper was down 1% to 157.8kt and titanium dioxide slag was up 8% to 321kt.
Aluminium was lower because of a safety shutdown at one of the three pot-lines at ISAL in Iceland and earlier than planned pot relining at Kitimat in Canada.
Rio Tinto Chief Executive J-S Jacques said
: “We have delivered improved production across the majority of our products in the third quarter, with a solid result at our Pilbara mines driving increased sales of iron ore into robust markets.
“Our strong value over volume approach, coupled with our focus on operational performance and disciplined allocation of capital, will continue to deliver superior returns to shareholders over the short, medium and long term.”
Is The Rio Tinto Share Price A Buy?
Rio Tinto said that its guidance is unchanged except for bauxite and alumina production which have both been somewhat reduced.
It also disclosed that third quarter exploration and evaluation spend was $177 million – 62% higher than the same period of 2018 – mostly reflecting increased activity on advanced projects.
It was pleasing to read that the company had signed a ‘Memorandum of Understanding’ with China Baowu Steel Group and Tsinghua University to develop and implement new methods to reduce carbon emissions and improve environmental performance across the steel value chain.
This was a pretty good update and if resource prices remain high then Rio Tinto can continue to create big profits, but I think it would be better to buy shares when the iron ore price is cheaper.
Until then, for ‘blue chip’ returns, I’d rather buy the shares in the free report below instead.
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