Rio Tinto (ASX: RIO
) has announced growth in the iron production for the second quarter of 2020.
What is Rio Tinto?
Rio Tinto Limited’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.
FY20 Q2 production
Rio Tinto announced that its Pilbara iron ore production was 83.2 Mt, this was growth of 4% compared to Q2 of 2019 and 7% growth compared to Q1 of 2020. Iron ore shipments were up 1% compared to Q1 of 2019 and up 19% compared to Q1 of 2020.
Compared to the second quarter of 2019 – bauxite production was up 9%, aluminium production was down 2%, mined copper was down 3%, titanium dioxide slag production was down 13% and Iron Ore Company of Canada (IOC) iron ore pellets and concentrate production was up 9%.
The company was able to achieve these results despite the various COVID-19 related challenges. Thankfully (for the company), iron ore prices remain strong and Rio Tinto remains on track to meet its 2020 iron ore guidance.
Rio Tinto CEO J-S Jacques said: “Our focus is to maintain a business as usual approach with many safeguards at a very unusual time. Our operational teams are continuing to run our assets safely so we can continue to contribute to local and national economies and serve our customers. We remain even more committed to our relationship with communities, following the Juukan Gorge events in the Pilbara, and we are engaging extensively with Traditional Owners around our operations and across Australia.
“We are executing our value over volume strategy to drive performance, productivity and free cash flow per share.”
Summary
Rio Tinto continues to perform well despite everything that’s going on. Miners can prove resilient in recessions if there is still demand for their key commodity. But I’d only think about buying a miner when the price of its main commodity, like iron ore, is at a weak point. But it’s good for WA, Australia and shareholders that iron ore is currently doing so well. Resilient iron ore prices and production should mean good news for the Rio Tinto dividend.
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