Rio cuts guidance as Pilbara problems mount
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Rio Tinto has experienced iron ore mine operational problems, particularly in its Greater Brockman hub in the Pilbara, causing the mining giant to cut its shipments forecast for the second time in around two months.
Rio said it would conduct a review of mine plans due to the problems, and has consequently reduced its total production guidance for its 2019 Pilbara shipments to between 320 million tonnes and 330mt.
This is down from its previous forecast of between 333mt and 343mt.
The news comes after a statement to the ASX on April 16, when Rio reduced its guidance range from between 338mt and 350mt.
In a footnote on the same statement, Rio disclosed that it shipped 1.5mt of low-grade products with its Pilbara blend for the first quarter of 2019.
Today, Rio said additional sales of these low grade products would continue during 2019 but did not specify the volume.
It also said its unit costs would be updated in mid July to reflect the change in volume guidance.
Yesterday, Rio Tinto's ASX-listed shares hit a record high of $106.85, having risen from $78 at the start of 2019.
Shares in Rio were down 4.8 per cent to trade at $100.68 at 11.15am AEST.
The news comes at a time when the iron ore price has been holding above $US100 per tonne, driven mainly by supply shortfalls after tailings dam collapses in Brazil and the limited capacity of other producers to lift output.