(Reuters) -Rio Tinto on Tuesday forecast annual iron ore shipments at the lower end of its outlook after third-quarter iron ore deliveries fell amid weak global demand, particularly in top metals consumer China.
Rio has been battling with a surge in production costs while iron ore prices are on track to end 2022 at their lowest in the last three or four years and will probably languish next year as well, as China and Europe cut steel output, while pressure mounts from additional supply.
Weakness in prices and cooling China demand had led Rio to more than halve its interim dividend payout in July.
The miner said it now expects annual iron ore shipments at the low end of its forecast range of 320 Mt to 335 Mt, adding that its outlook was dependent on ramping-up the Gudai-Darri and Robe Valley projects, and the availability of skilled labour.
The world’s biggest iron ore producer shipped 82.9 million tonnes (Mt) of the steel-making commodity in the three months ended Sept. 30, compared with 83.4 Mt a year earlier.
Rio, however, said that on a quarter-on-quarter basis, shipments rose 4 per cent, despite two rail outages, including one on the Guidai-Darri line.
The company retained its annual cost outlook for iron ore, but raised estimates for copper to between 150 cents and 170 cents per pound from 130 cents to 150 cents a pound.
In a separate announcement, Rio said it would “modernise” a nearly 50-year-old agreement with Wright Prospecting to develop the Rhodes Ridge iron ore project, and aims to operationalise a plant by the end of the decade with an initial annual capacity of up to 40 million tonnes.
Rio last month said it would team up with China Baowu Steel Group to develop an iron ore project in Western Australia for $2 billion.
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