Yahoo Finance Rio Tinto cuts 2017 iron ore guidance as first-quarter shipments rise
SYDNEY (Reuters) - Rio Tinto (RIO.AX) on Tuesday cut its 2017 production guidance from its Australian iron ore mines due to a delay in the rollout of its autonomous mine and transport technology, based on driverless trains.
The world's no 2 iron ore producer said output from its Pilbara mines would fall to between 330 and 340 million tonnes from a previous forecast of 350 million tonnes, as testing of its AutoHaul technology continues.
Still, Rio Tinto posted an 11 percent rise in first quarter iron ore shipments and confirmed it was on track for a record 350 million tonnes in 2016, as it runs its mines at full tilt despite a global supply glut amid slower Chinese industrial growth.
The increases in the bulk commodity underscores the determination of outgoing Chief Executive Sam Walsh to defy calls for supply restraints until markets are in better balance.
Rio Tinto's first quarter shipments climbed to 80.8 million tonnes from 72.5 million in the year-ago quarter, although dropping from 91.3 million tonnes in the preceding quarter due to seasonal factors.
"We continue to experience volatility in commodity prices across all markets," Rio Tinto Chief Executive Sam Walsh, who last week tipped a second-half contraction in iron ore prices, said in a statement.
Iron ore stood at $59.40 a tonne, advancing nearly 40 percent since January, though still far from all-time highs near $200 (140 pounds).
Walsh, who retires in July, has repeatedly defended running the company's mines at maximum speed even as demand growth from China's steel mills wane, saying any curtailment would simply open the door for competitors to fill the void and do little to lower supply and elevate prices.
BHP Billiton In thermal coal, a 3 percent decline in first quarter output to 5.5 million tonnes versus a year ago points to a yearly total of 16 million to 17 million tonnes for its share of overall output, Rio Tinto said. In copper, where Rio Tinto is looking for greater exposure to offset a high-weighting toward iron ore, first quarter mined production slipped 2 percent to 141,200 tonnes against the same period a year ago. (Reporting by James Regan; Editing by Richard Pullin)
