Pilbara iron ore shipments for the June quarter were 77.7 million tonnes, on a 100% basis, up 1% over the March quarter, but 6% down on the same quarter of 2016 due to accelerated rail maintenance.
Half-year shipments of 154.3Mt were 3% lower than the same time last year due to weak weather in the March quarter.
UBS’s estimate was for quarterly shipments of 78.2Mt and half-year sales of 155Mt.
Full-year iron ore shipping guidance has been narrowed to 330Mt, from 330-340Mt.
Rio said the guidance took into account first-half output and further rail maintenance required in the second half to improve track conditions.
Morgans analyst Adrian Prendergast said the soft second quarter was not a concern.
“While iron ore volumes have not been spectacular so far in CY17, this has been more than offset by the ongoing resilience of the iron ore price,” he said.
“We would see any share price volatility resulting from today's 2Q result as an opportunity to top up positions in Rio ahead of what we expect to be a good first half result in early August.”
Average iron ore pricing achieved for the first half was US$62.40 per wet metric tonne on a free-on-board basis, higher than the $49.30/wmt achieved over 2016.
On a brighter note for Rio, it posted record quarterly bauxite production of 12.9Mt, up 7% year-on-year due to a strong performance at Weipa and Gove.
Aluminium production of 888,000t was in line with last year and the previous quarter.
Mined copper production of 124,700 tonnes was up 48% over the March quarter, as Escondida ramped back up following a strike.
Hard coking coal production of 3.1Mt for the half was down by 17% due to Cyclone Debbie, while semi-soft and thermal coal output of 10.7Mt was up 5%.
Full-year hard coking coal guidance was revised down to 7.2-7.8Mt from 7.8-8.4Mt.
Quarterly titanium dioxide slag production jumped by 34% year-on-year due to higher demand.
“This was a solid quarter for production, including record output at our bauxite operations,” Rio chief executive J-S Jacques said.
“We believe our focus on capital discipline, maximising cashflow from operations, driving productivity and portfolio shaping will continue to support the delivery of strong cash generation and shareholder returns.”
Rio reduced gross debt by $2.5 billion during the first half, with the bond buy-back early redemption costs to decrease first-half earnings by around $180 million and cashflow from operations by around $260 million, which will be offset by savings in future periods.
Rio also expects to complete the $2.69 billion sale of the Coal & Allied business to Yancoal Australia this quarter.
Pre-tax and pre-divestment exploration and evaluation expenditure charged to the profit and loss account in the first half was $175 million, down from $267 million in the same time last year.
Shares in Rio gained 0.6% to A$65.92 yesterday.
