Rio Tinto Says Pandemic Remains a Threat to Mongolian Copper Exports – Product Commentary
By Rhiannon Hoyle
Rio Tinto PLC announced on Tuesday a decline in full-year output of all the products it produces, including iron ore, copper and aluminum. Here are some highlights from its fourth quarter operational report.
On commodity markets:
“Market momentum has been broadly positive throughout 2021 for most commodities, lifting a number of prices to cyclical highs. Fiscal and monetary support and successful vaccination campaigns were key factors in the strong demand growth that ultimately pushed global supply chains to their limits and created difficult conditions for many global producers. We are encouraged by the growth outlook for the year ahead, but remain alert to potential disruptions caused by new variants of Covid-19 and geopolitical tensions. »
On copper operations in Mongolia:
“Copper production mined from the open pit was 9% higher than 2020 with improved performance, a temporary increase in grades and increased mill feed following geotechnical issues in the first half of the year. , partially offset by a decline in headcount due to Covid-19. In the fourth quarter, strict restrictions at Chinese borders continued due to the increase in Covid-19 cases in Mongolia. We continue to work closely with Mongolian and Chinese authorities and our customers to manage the risk of supply chain disruptions. Cross-border shipments of concentrate to China have resumed with certain measures in place to transport larger volumes safely and efficiently, but uncertainty continues to exist with the rate of Covid-19 cases in Mongolia Force majeure declared on shipments from the March 30 remains in place.
On Australian iron ore operations:
“The Pilbara operations produced 319.7 million tonnes (Rio Tinto share 266.8 million tonnes) in 2021, 4% less than in 2020. This was due to above average rainfall in the first six months of the year, cultural heritage management and brownfield growth and replacement delays related projects. Ongoing Covid-19 restrictions and a tight labor market have further impacted our ability to access experienced contractors and special skills Production at the new virgin mine at Gudai-Darri and the abandoned mine replacement project at Robe Valley has been delayed due to the impact of Covid-19 on availability labor and the inability to perform pre-delivery quality assurance and quality control at international steel fabricators due to travel limitations.”
On the Chinese steel market:
“China’s crude steel output and iron ore imports were flat year-on-year, with steel output exceeding 1 billion [metric] tons for the second time, despite numerous restrictions on the operation of steel mills and a slowing real estate sector. Steel consumption and production rates in China slowed significantly in the fourth quarter of 2021, but sea-based iron ore supply improved, driving prices down around 30% iron ore in the fourth quarter compared to the previous quarter. Meanwhile, the recovery in demand for steel and iron ore in developed and emerging economies has maintained momentum and global crude steel production has increased by around 6% year-on-year – one of the largest absolute annual increases in history – to reach a record total. nearly 2 billion tonnes in 2021.”
Write to Rhiannon Hoyle at [email protected]