Rio Tinto Says Pandemic Remains Threat to Mongolia Copper Exports -- Commodity Comment
18 Gennaio 2022 - 12:09AM
Dow Jones News
By Rhiannon Hoyle
Rio Tinto PLC on Tuesday reported a fall in full-year production
across all the commodities it produces, including iron ore, copper
and aluminum. Here are some remarks from its fourth-quarter
operational report.
On commodity markets:
"Market dynamics were broadly positive throughout 2021 for most
commodities, lifting a number of prices to cyclical highs. Fiscal
and monetary support and successful vaccine campaigns were key
contributors to strong demand growth that ultimately stretched
global supply chains to their limits and created challenging
conditions for many of the world's producers. We are encouraged by
growth prospects in the coming year but remain vigilant in relation
to potential disruption from new Covid-19 variants and geopolitical
tensions."
On Mongolia copper operations:
"Mined copper production from the open pit was 9% higher than
2020 with improved performance, temporary increase in grades, and
increased mill feed following geotechnical issues in the first
half, partly offset by lower staffing levels due to Covid-19. In
the fourth quarter, stringent Chinese border restrictions continued
due to increased cases of Covid-19 in Mongolia. We continue to work
closely with the Mongolian and Chinese authorities and our
customers to manage the risk of supply chain disruptions.
Cross-border concentrate shipments into China have resumed with
some measures in place to transport greater volumes in a safe and
efficient manner, however uncertainty continues to exist with the
rate of Covid-19 cases in Mongolia. The force majeure declared on
shipments from March 30 remains in place."
On Australian iron-ore operations:
"Pilbara operations produced 319.7 million tons (Rio Tinto share
266.8 million tons) in 2021, 4% lower than 2020. This was due to
above average rainfall in the first half of the year, cultural
heritage management and delays in growth and brownfield mine
replacement tie-in projects. Ongoing Covid-19 restrictions and a
tight labor market have further impacted our ability to access
experienced contractors and particular skill sets. Production from
the new greenfields mine at Gudai-Darri and brownfield mine
replacement project at Robe Valley, was delayed due to Covid-19
impact on labor availability and an inability to conduct
pre-delivery quality assurance and control at international steel
manufacturers due to limitations on travel."
On China's steel market:
"China's crude steel production and iron ore imports were stable
year on year, with steel production exceeding 1 billion [metric]
tons for a second time, despite numerous steel mill operating
restrictions and a slowing property sector. Steel consumption and
production rates in China decelerated significantly during the
fourth quarter of 2021 however, iron ore seaborne supply improved,
resulting in a circa 30% decline in iron ore prices in the fourth
quarter versus the prior quarter. Meanwhile, the steel and iron ore
demand recovery in developed and other emerging economies
maintained its momentum and global crude steel production grew by
an estimated 6% year on year--by one of its largest absolute annual
increments in history--to a record total of almost 2 billion tons
in 2021."
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
January 17, 2022 17:54 ET (22:54 GMT)
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