Mining giant Rio Tinto is forecasting its iron ore shipments to rise in 2022 after a dip in 2021, while the schedule for first production at its Gudai-Darri project in Western Australia has been pushed back due to issues related to the pandemic, the company said Jan. 18 in its fourth quarter production results.
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Register NowThe company's iron ore shipments from the Pilbara region of Western Australia fell 5% year on year to 84.1 million mt in October-December, and edged up 1% from the previous quarter, the company said.
That took Rio Tinto's 2021 shipments to 321.6 million mt, down 3% year on year, but within guidance of 320 million-325 million mt, which was downgraded in October from 325 million-340 million mt.
For 2022, Rio has set iron ore shipment guidance at 320 million-335 million mt.
"Our guidance assumes development of the pandemic does not lead to government-imposed restrictions and widespread protracted cases related to new highly contagious variants with high severity, which could result in a significant number of our production-critical workforce and contractor base being unable to work due to illness and/or isolation requirements," the company said.
Western Australia has largely kept its state and international borders shut throughout the pandemic and maintained very low case numbers, with just two new local cases and 12 travel-related cases reported Jan. 17, but plans to ease border restrictions from Feb. 5.
Rio Tinto's weaker 2021 shipment volumes came as its iron ore production fell 4% year on year to 319.7 million mt.
"This is due to above-average rainfall in the first half of the year, cultural heritage management and delays in growth and brownfield mine replacement projects," Rio Tinto said.
First production at the Gudai-Darri mine's main plant is now expected in the second quarter after being pushed from January-March, it added.
Rio Tinto noted that pandemic-induced restrictions, including labor access and supply chain quality issues, have been impacting projects.
"In 2021 we continued to experience strong demand for our products while operating conditions remained challenging, including due to prolonged COVID-19 disruptions," company CEO Jakob Stausholm said in the report.
The company reported an average realized iron ore price of $111.50/wet mt FOB for H2 2021, down from $154.90/wmt in H1.