‘Resilient’ Rio Tinto yet to feel effects of war in Middle East as copper again proves a standout
Rio is yet to feel the effects of a global oil crisis fuelled by war in the Middle East but concedes it does not know how the ongoing conflict will hit supply chains in the second half of the financial year.
Rio Tinto is yet to feel the effects of a global oil crisis fuelled by war in the Middle East but concedes it does not know how the ongoing conflict will hit supply chains in the second half of the financial year.
Releasing its first-quarter results on Tuesday, the miner said it was keeping cost guidance unchanged and noted that direct impacts on it giant iron ore, copper and lithium operations from the US and Israel’s attacks on Iran had so far been limited.
“Our scale, global reach and sophisticated supply chains provide a resilient foundation and have enabled the business to operate normally,” it said.
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By continuing you agree to our Terms and Privacy Policy.“We consume about 1.6 billion litres of diesel annually, around two-thirds in the Pilbara. Despite higher diesel prices steepening the cost curve, our cost position is resilient, underpinned by scale and global supply-chain leverage.”
Rio said prices for jet fuel, caustic soda and other inputs had risen since war broke out eight weeks ago.
While stating it had contingency plans in place should the US and Iran fail to reach a peace deal in the short term, it acknowledged “we have relatively limited visibility of how the ongoing conflict will affect supply chains in H2”.
Tropical cyclones Mitchell and Narelle shaved eight million tonnes of shipments off Rio’s results in the first three months of the year, but it expects to make up half of that total in the current quarter.
Overall, production from the miner’s massive Pilbara portfolio was up 13 per cent year-on-year to 78.8mt — the second-highest first-quarter result since 2018,
Sales rose 2 per cent to 75.7mt. Full-year guidance was left unchanged at between 343mt and 366mt.
Copper again proved a standout for Rio, with production up 9 per cent in the first three months of the financial year, compared to a year earlier, at 229,000t as the Oyu Tolgoi project in Mongolia continues to ramp up as planned.
“The unmatchable mix and scale of our portfolio has ensured growth and supply chain resilience against changing operating conditions as we continue to closely monitor the evolving situation in the Middle East,” said chief executive Simon Trott.
“Our stronger, sharper, simpler way of working is enabling us to move at pace to achieve productivity benefits across the business.
“The first $650 million of annualised benefits is now fully implemented, as promised, with substantially more under way.”
More to come.
