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Digging Deeper Into Rio Tinto's Latest Iron Ore Production Numbers

Summary

Mining giant Rio Tinto has recently released its quarterly production numbers.

Rio Tinto continues to grow iron ore shipments and production at double-digit rates.

But thanks to delays, Rio Tinto has cut its 2017 production outlook.

The guidance cut will be taken positively by the broader market.

But the fact remains that Rio Tinto remains committed to growing production to new highs after 2017 in an already oversupplied market.

Mining giant Rio Tinto (NYSE:RIO) has recently released its quarterly production numbers. The world's second biggest iron ore producer continues to increase output at double-digits rates, but what's got everyone's attention is that it has trimmed 2017 outlook by almost 15 million tonnes.

Stockyard Paraburdoo, The Pilbara. Image: Rio Tinto

The company's global iron ore production, on a 100% basis, clocked in at 84 million tonnes while shipments came in at 80.8 million tonnes, up 13% and 11% from the same quarter last year respectively. More than 95% of the output came from Western Australia's Pilbara region. Rio Tinto's share of production and shipments was around 80% each. The increase in production came as Rio Tinto completed brownfield development and ramped up its infrastructure capacity at Pilbara. Though production slipped 4% on a sequential basis, it was largely due to seasonal factors.

Rio Tinto confirmed that it remains on track to achieve its record iron ore shipments target of 350 million tonnes for the current year. What's interesting here is that Rio Tinto ran out of iron ore inventories last year, which meant that the company had to rely almost entirely on its mining operations...


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