(Alliance News) - Rio Tinto PLC on Friday said it expects iron ore shipments at the lower end of its 2021 guidance range as output was curbed by rainfall, Covid-19, tie-in and ramp up of brownfield replacement mines, and cultural heritage management concerns.
The Anglo-Australian miner said production of its primary product, Pilbara iron ore mined in Western Australia, fell in the first half of 2021.
Rio's Pilbara operations produced 152.3 million tonnes of iron ore in the first half of 2021, 5% lower than the first half of 2020. This was due to above-average rainfall, shutdowns to enable replacement mines to be tied in, processing plant availability, and cultural heritage management.
The company said its Pilbara iron ore shipments fell 12% year-on-year to 76.3 million tonnes in the second quarter alone. While quarterly Pilbara output also slipped to 75.9 million tonnes, down 9% from the same period a year prior.
"We faced some challenges in the first half, notably at our Pilbara operations, which were impacted by replacement mine tie-ins and materially higher rainfall," the miner said.
"We expect iron ore shipments to be at the low end of the guidance range which remains subject to Covid-19 disruptions, tie-in and ramp up of brownfield replacement mines and management of cultural heritage."
Its current iron ore shipments forecast range is between 325 million and 340 million tonnes for 2021.
First-half copper output from the Kennecott mine based in Utah, US, and Escondida in Northern Chile declined by 6% and 17%, respectively. While, bauxite production slipped to 27.3 million tonnes from 28.4 million tonnes year-on-year in the first six months of 2021.
Mined copper and bauxite production, are also expected to be at the low end of the guidance range in 2021.
"Heightened Covid-19 constraints, which resulted in numerous travel restrictions, added further pressure on the business and limited our ability to access additional people, particularly in Western Australia and Mongolia, in order to deliver operational improvements or maintenance initiatives and accelerate projects," the miner added.
Rio Tinto noted that despite 30 months without a fatality on site, its injury frequency rate of did increase slightly in the second quarter to 0.39, compared to 0.37 in the same period a year prior, and 0.35 the previous quarter.
"There is no room for complacency," the company said.
Last year, Rio Tinto destroyed a 46,000-year-old Aboriginal heritage site - the Juukan Gorge caves - to expand the Pilbara iron ore mine in Western Australia attracting public outcry, regulatory scrutiny, and changes at the top of the company.
Initially, the cave explosion led Rio's former chief executive, Jean-Sebastien Jacques to resign. While the company's chair said he will stand down in 2022.
The firm appointed former Treasurer and Aboriginal Affairs Minister Ben Wyatt as non-executive director in early June. The Financial Times said it was the first time that Rio Tinto has appointed an indigenous Australian to its board.
Also, Peter Cunningham was brought in as chief financial officer and executive director in mid-June and former Unilever PLC counsel Isabelle Deschamps was made chief legal officer in July.
The company said that its consideration of cultural heritage limited its output in the first half, as it takes care to avoid any similar destruction.
"Known sites of cultural significance have been re-assessed," Rio said, "and mine plans adjusted or measures taken to avoid disturbance, and we increased buffer zones in some cases."
The miner said it has continued discussion of a "co-management of country approach" with the Puutu Kunti Kurrama and Pinikura people, Aboriginal Australian peoples from the Pilbara region as rehabilitation works continue around the damaged Juukan Gorge site.
Shares in Rio Tinto were trading down 1.6% at 6,045.00 pence each in London on Friday morning.
By Scarlett Butler; scarlettbutler@alliancenews.com
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