The Rio Tinto (ASX: RIO) share price is up 3% this morning after giving the market an update.
What is Rio Tinto?
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.
What did Rio Tinto announce?
The mining giant announced its first quarter production results.
Iron ore shipments were up 5% compared to the first quarter of 2019, though it was down 16% compared to the December 2019 quarter. Shipments were up 2% on the prior corresponding quarter, but down 7% on the last quarter. Importantly, demand from China continues to recover.
Management said that there was a strong recovery across the network in March following tropical cyclone Damien in February.
Compared to the same period last year, bauxite production was up 8%, aluminium production was down 2% and mined copper production was down 8%.
At Kennecott in the US, the company is working to resume normal operators after an earthquake with a 5.7 magnitude. The mine, concentrator, tailings storage facility and refinery have all resumed safe and stable operations. However, there was some damage to the furnace which will impact full year copper guidance.
Capital expenditure is now expected to be between $5 billion to $6 billion, down from $7 billion partly due to COVID-19 constraints and partly due to favourable currency impacts from the strong US dollar.
Rio Tinto Chief Executive J-S Jacques said: “All our assets continue to operate and we achieved a very robust production performance in the first quarter. Our world-class portfolio and strong balance sheet serve us well in all market conditions and are particularly valuable in the current volatile environment. Our resilience and value over volume strategy mean we can continue to invest in our business, and support our communities and host governments.”
I think the best time to buy resource shares is when the commodity price is low, which isn’t right now. I’d rather invest in these technology shares which have long term competitive advantages:
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Disclosure: at the time of publishing, Jaz does not have a financial interest in any of the companies mentioned.
