Rio Tinto increases iron ore production targets to keep pace with booming China

First of the miners reporting this week sets the pace for strong sales

Rio Tinto may secure a record price increase of more than 95% for iron ore shipped to Asian steel mills

19 January 2021

China’s surging demand for commodities to feed its booming factories boosted Rio Tinto’s vast iron ore operations in the past quarter.

An output statement today showed strong production of iron ore, which it extracts largely from its mines in the Pilbara resource in West Australia.

Rio upped its iron ore output targets to close to its 2015 peak this year, leaving JPMorgan analysts to suggest global iron ore supply is likely to remain tight in 2021.

The price of iron ore has surged since April as China stimulated its economy to boost factories there.

Shipments could be nearly 3% higher than last year at 325 million to 340 million tonnes.

The company is attempting to heal the wounds it inflicted on itself with its catastrophic decision to blow up ancient aboriginal caves in the Juukan Gorge. The scandal cost the job of chief executive Jean-Sebastien Jacques who failed to realise what a disaster it was to the company’s reputation in its most important operating location.

New chief executive Jakob Stausholm now needs to reboot the culture to add awareness of environmental, social and governance issues to Jacques’ hard-driving cashflow and production focus.

Rio today said it did not know what the future impact on its business of the scandal would be. Rio is likely to face far tougher scrutiny of its impact on cultural sensitivities as it bids to buy new land to exploit.

Rio is the first of several mining companies to report output figures this week. One of those, Glencore, today said a subsidiary was selling its 90% stake in Zambia’s Mopani Copper Mines to the 10% owner ZCCM. Glencore will continue as lender of $1.5 billion to it.

MORE ABOUT

Rio

Rio Tinto increases iron ore production targets to keep pace with booming China

Read More