Australia-based miner Rio Tinto, the world's second biggest iron ore producer, has announced that in the first quarter of the current year iron ore production from its Pilbara operations in Western Australia increased by two percent year on year to 77.8 million mt, while falling by seven percent from the previous quarter. In the given quarter, the company's iron ore shipments from its Pilbara operations amounted to 72.9 million mt, rising by five percent from the same quarter of the previous year, due to a strong recovery across the network in March following tropical cyclone Damien in February this year and falling by 16 percent from the last quarter of 2019.
According to Rio Tinto, demand in China continues to recover, while in the rest of the world the outlook is more uncertain. The company said in a statement that coronavirus restrictions affect supply chains and the movement of people across the world so commodity supply is being disrupted. Rio Tinto also indicated that demand for high-quality iron ores remained strong in the first quarter this year due to seaborne supply disruptions and solid demand from China’s steel mills despite the impact of the coronavirus.
Rio Tinto expects that its capital expenditure will be in the range of $5-6 billion in 2020, declining from the previous estimate of $7 billion due to coronavirus restrictions and the favourable currency impact from the strong US dollar. Rio Tinto’s Pilbara iron ore shipments guidance for the current year has also remained unchanged from the previous guidance of 324-334 million mt.