The Rio Tinto Ltd (ASX: RIO) share price is down 2% after the iron ore giant reported its quarterly production numbers.
Rio Tinto is one of the world’s largest iron ore miners. It revealed its performance for the three months to 31 March 2023.
Rio Tinto’s production update
In the first three months of 2023, it produced 79.3 million tonnes of iron ore, which was an increase of 11% compared to the first quarter of 2022.
Bauxite production fell 11% to 12.1 mt, aluminium production rose 7% to 785 kt, mined copper was flat at 145 kt, titanium dioxide slag rose 4% to 285 kt and Iron Ore Canada pellets and concentrate increased 5% to 2.5 mt.
2023 guidance change
Most of its guidance was unchanged, but the miner did say that its mined copper production guidance was lowered to between 590 kt to 640 kt, down from the previous guidance of 650 kt to 710 kt.
This guidance reduction was primarily because of the conveyor outage at Kennecott, together with the geotechnical challenges in the open pit at Escondida.
It also said that the iron ore shipment guidance of between 320 mt to 335 mt is subject to weather and market conditions. The Pilbara shipments guidance remains subject to progressing the ramp-up of production from new mines and management of cultural heritage.
Management comments
The Rio Tinto CEO Jakob Stausholm said:
We continue to make steady progress with our highest ever first quarter shipments achieved in the Pilbara iron business. Through the ongoing deployment of our safe production system we expect to see a sustainable lift in operating performance across our global portfolio over time, in line with improvements already achieved.
We remain focused on disciplined growth in materials the world needs for the energy transition, delivering first sustainable production from the underground mine at Oyu Tolgoi in Mongolia and progressing early works on the Rincon lithium project in Argentina. We advanced the Simandou high grade iron ore project in Guinea with our partners, and entered into an agreement for a joint venture to unlock La Granja in Peru, one of the largest undeveloped copper projects in the world.”
Final thoughts on the Rio Tinto share price
A reduction of the copper guidance isn’t ideal, though the business can continue to make good iron ore earnings at the current iron price.
I like the idea of the company’s expansion into greener commodities like lithium and copper. I think this will make it a better business in the long run.
But, I’d prefer to wait for a Rio Tinto share price of below $100 if I were trying to beat the overall market return.
