Rio Tinto’s iron ore division is firing on all cylinders based on the first quarter performance, according to Jefferies.
Shipments rose 16% to 82.5 million tonnes (Mt) compared to a year earlier, though were down 6% in the previous three months.
Jefferies noted shipments exceeded production of 79.3Mt as Rio ran down its stockpile.
“Rio had some ‘plant reliability and materials handling issues’ in the Pilbara, but this is a solid start for the year in its most important segment.”
Iron ore prices are also up by 27% from the final quarter of 2022, which helps added the US bank, while full-year Pilbara production guidance of 320-335mt was unchanged as was unit cost guidance of $21.00- $22.50/tonne.
Copper production was flat due to a 36% drop at Kennecott in the US that was blamed on record snowfall and a conveyor belt failure.
Escondida output was up 6%, while Oyu Tolgoi rose 41% as underground production started at the Mongolian mine but Rio cuts its copper guidance for the year to 590-640,000t from 650-710,000t previously.
Overall, Jefferies kept a buy rating and a 7,500p price target.
Shares today were down 1.2% at 5,463p.