(Kitco News) - U.K. listed mining giant Rio Tinto (RIO:LSE) has said there are considerable headwinds due to labor shortages, muted Chinese demand, falling commodity prices, and the threat of recession. The situation in China is really affecting miners at the moment and BHP (BHP:ASX) report on 19th July, there could be further confirmation of the impact. Rio said iron ore output and deliveries were up 10% and 12% respectively compared to the first quarter of this year, with mined copper up 1%, but aluminum production was down 1%.
FY guidance for iron ore and copper was maintained, as for most metals, but aluminum, alumina, and diamond guidance was trimmed slightly. Unit cost guidance for iron ore and copper remained unchanged. Rising COVID cases at its Pilbara operations have led to "elevated levels of unplanned absences", driving a 2% drop in shipments of the steel-making commodity in the first half through June
Adding to the voes from the report, China reported weaker economic growth for the second quarter of 0.4%, well short of the 1.2% forecast and down from 4.8% in the first quarter.
Rio Tinto chief executive Jakob Stausholm said “We strengthened our operational performance at a number of sites, which we will now replicate across the portfolio,” He added “We also fired the first draw bell at the Oyu Tolgoi underground project in June, and started producing scandium and tellurium. These critical minerals are being extracted from existing waste streams at our titanium operation in Quebec and copper operation in Utah, without the need for new mining.”
Rio Tinto shares are trading 2.31% lower after the most recent update. This is the lowest level since 19th November 2019. Away from that, there is a significant resistance zone at 4354 and if broken it would take the price to a level not seen since late October 2020.
