While the outlook for the rest of the world remains “uncertain”, Rio Tinto (ASX: RIO) claims demand for its iron ore product in China remained strong in the March 2020 quarter, despite the impact of COVID-19.
Although iron ore shipments from Rio’s Pilbara operations were down 16% on the December 2019 quarter, compared to the same period last year (Q1 2019) they were up 5% to 72.9 million tonnes for Q1 2020.
Underpinning the shipment volumes was Pilbara iron ore production of 77.8Mt – up 2% on Q1 2019 and a 7% decline on Q4 2019.
“All of our assets continue to operate, and we achieved a very robust production performance in the first quarter,” Rio chief executive officer J-S Jacques said.
He added although the company’s priority was to ensure its workforce and surrounding communities were safe, it was maintaining a “business as usual” approach to its operations.
Bauxite production for Q1 2020 rose 8% to 13.8Mt compared to Q1 2019, however it had declined 9% on Q4 2019 levels.
In its aluminium division, production dipped 2% to 783,000t on Q1 2019 levels and was flat compared to Q4 2019.
Mined copper was 133,000t – an 8% fall on Q1 2019 and down 4% on the December quarter.
Rio attributed the drop in copper output to lower grades, which were partially offset by higher throughput.
Meanwhile, the company generated 293,000t of titanium dioxide slag in Q1 2020, a 1% dip on Q1 2019 and up 3% on Q4 2019.
Outlook going forward
Rio noted that work on all its major projects had “progressed well” in Q1 2020, however it was now being impacted by COVID-19, which includes government restrictions on the movement of goods and people.
As a result, the company has revised its capital expenditure estimate of $7 billion for 2020 down to between $5 billion and $6 billion.
Despite recovering demand in China, Rio anticipates ongoing disruptions in the rest of the world due to COVID-19 restrictions which impact supply chains and movement globally.
In South Africa, Rio has reduced its mining as part of a government directive in the region to implement a 21 day lockdown that began on 26 March.
Over in Quebec, Rio said it was working with the government there to comply with regulations to slow down non-critical projects and activities in the region.