Mining giant Rio Tinto Limited (ASX: RIO) has released its production numbers for the third quarter of FY20.
What did Rio Tinto report?
The company reported that its production (compared to FY19 Q3) fell 1% to 86.4Mt and shipments dropped 5% to 82.1Mt.
Bauxite production grew 5% to 14.5Mt, aluminium production rose 1% to 797kt and mined copper dropped 18% to 129.6kt. Refined copper was 57% lower, primarily due to delays in restarting the Kennecott smelter.
Rio Tinto CEO J-S Jacques said: “We have delivered a good operational performance across most of our assets catching up on planned maintenance activity, particularly in iron ore, and continuing to adapt to new operating conditions as we learn to live with COVID-19. We have maintained our capex guidance and our 2020 production guidance across our key products.
“We are focused on regaining the trust of the Puutu Kunti Kurrama and Pinikura people with a focus on remedy. On Tuesday 13 October we wrote a letter to Traditional Owners in the Pilbara detailing that we will review all heritage disturbance in consultation with them; and shared our intention to modernise our agreements which includes modifying clauses to ensure respect, transparency and mutual benefit.”
I think this was a solid update from Rio Tinto. You can’t expect a resource business to beat last year’s performance every single year. Considering the high iron ore price, Rio Tinto seems on course for a solid FY20 result.
However, I don’t think it makes much sense to buy Rio Tinto shares at the moment. It’s at a strong point in the cycle. It’s best to buy during weakness. I’d buy other ASX dividend shares first like Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) which I covered here.