Markets Unimpressed with Rio Tinto’s Production Results

Rio Tinto Ltd [ASX:RIO] released their second quarter production report today.

The company shipped 86.7 million tonnes during the second quarter. This was a 19% rise from the previous quarter and a 1% increase from the same period last year.

Here are the results:

rio tinto production

Source: Rio Tinto

Rio’s Chief Executive Jean-Sebastien Jacques had this to say about them:

We delivered a strong performance, particularly in iron ore and bauxite, demonstrating the underlying resilience of our business and ability to adapt in difficult conditions. Our iron ore assets are performing well in a strong pricing environment and we are on track to meet our 2020 iron ore guidance. Despite various COVID-19 related challenges, all our assets have continued to operate.

Demand from China rising

China was mostly in lockdown for the first quarter battling the epidemic but their demand for iron ore imports is rising.

And so has the price of iron ore after the pandemic halted some of Vale’s iron ore operations in Brazil and had to revise down their production guidelines. You can read more on this here.

But markets weren’t impressed

At time of writing, shares for RIO are trading slightly lower today after the announcement as results came below expectations.

This follows after Rio Tinto said their expansion at their Oyu Tolgoi mine in Mongolia would take longer and be more expensive than they had anticipated. Go here if you’re interested in reading more.

Rio Tinto is also in the eye of the storm after it came to light that the company blew up a 46,000-year-old shelter to expand an iron ore mine.

And there are still concerns more lockdowns could crimp China’s demand.

So far though, higher iron ore prices has been pushing the Australian dollar higher against major currencies.

But how will the Aussie dollar move next?

Check out Rum Rebellion Editor Greg Canavan’s latest report, ‘Will the Aussie Dollar Enjoy a Post-Pandemic Resurgence?’ where he tackles this question.

To download his free report, click here.


Selva Freigedo


Selva Freigedo is a research analyst for The Rum Rebellion.

Born in Argentina, her passion for economic analysis started at a young age. Her father was an economist for the Argentinean governments and the family used to discuss politics and economics at the dinner table.

Argentina is a country with an unusual economic history. Growing up there gave Selva first-hand experience on different economic phenomena such as hyperinflation, devaluation and debt default.

Selva has also lived in Brazil, Spain and the USA.

Back in 2000 she was living in the US as the dot com bubble popped…
And in 2008 she was in Spain as the property market exploded and then collapsed…

She has seen first-hand what happens when bubbles burst.

Selva joined Fat Tail Investment Research’s team in 2016, as an analyst. She now writes from her vantage point in Australia, where she settled in 2015.

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