SMM7, June 29: today, the Anglo-Australian mining company Rio Tinto released its results for the first half of 2020, which showed that collective profits fell 4% in the first half of the year. In the six months to June 30, net profit fell 20% to US $3.32 billion, down from US $4.13 billion in the same period last year. The company said underlying profit fell 4 per cent to $4.75 billion in the first half, but exceeded analysts' forecasts of $4.09 billion.
Iron ore prices exceeded US $110 a tonne this month because Brazilian supplies were disrupted by the spread of coronavirus in some Vale mines, the company said. By contrast, Australian iron ore production is largely unaffected by the virus, allowing miners, including Rio Tinto and BHP Billiton, to continue to ship the commodity in large quantities. Rio Tinto forecasts annual shipments of between 324 million and 334 million tons.
Rio Tinto's iron ore shipments increased by 3 per cent compared with the first half of 2019, driven mainly by strong Chinese demand and restrictions on seaborne supplies. Profit before basic interest, tax, depreciation and amortisation was $7.7 billion, up 2 per cent from the first half of 2019, reflecting higher sales and lower operating costs, and iron ore prices were stable year-on-year.
During the reporting period, copper production was 265700 tons, down 5 per cent from the first half of 2019, due to lower copper grades at Kennicott and Oyu Tolgoi open-pit mines, partly offset by higher Escondida production. Refined copper production fell 43 per cent from the first half of 2019, reflecting a decline in Kennicott production due to the earthquake and a 45-day smelter shutdown.
But the Escondida copper mine in Chile is reducing the number of workers because of a drop in copper shipments as a result of supply disruptions caused by novel coronavirus. Rio Tinto estimates that the outbreak has disrupted 3 per cent of the world's copper supply and warned that the situation could increase further. The rise in iron ore prices was outweighed by the impact of the copper business.
In addition, the production guidance for Rio Tinto's products remains unchanged from the first-quarter operational assessment released in April.
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