The Anglo-Australian iron ore miner warned of a COVID-19 lockdown resurgence, and prolonged Russia-Ukraine conflict – which will pose further lacklustre export numbers. Its efforts to ramp up Pilbara operations in Western Australia were impacted in Q1 2022 by labour shortages and supply chain snags.
A trickier road ahead
Rio Tinto’s Chief Executive Jakob Stausholm said through a media statement: “Production in the first quarter was challenging as expected, re-emphasising a need to lift our operational performance.” The company shipped 71.5 million tonnes (mt) of the steel-making commodity in Q1 2022, compared with 77.8 million mt a year earlier and a Visible Alpha consensus estimate of 76 million mt. Production for the quarter stood at 71.7 million mt, down 6.2 per cent from a year earlier. It expects increased iron ore production capacity and improved product mix in H2 2022 with the commissioning and ramping up of Gudai-Darri, a greenfield mine development in East Pilbara.
Rio Tinto was also a major miner to cease doing business with Russia. Though it has no operational assets in Russia or Ukraine, it owns 80 per cent stake in Queensland Alumina Ltd (QAL) through a joint venture with Russia’s Rusal, the world’s second-largest aluminium producer. The company announced earlier this month that it had taken sole charge of QAL operations.
Experts also confirmed the global appeals to China to lift its zero-COVID policy. However, it is said the republic has a weak vaccine rate for seniors – which is a threat to its healthcare. The population of unvaccinated citizens is a bigger gamble that China may not have the means to withstand the loss. Early April, the Guardian reported more than 92 million Chinese citizens aged 65 or above had still not received 3 vaccine doses, leaving them at greater risk of contracting severe symptoms or dying from the virus. More worryingly, 20.2 million people aged 80 and above have not been fully vaccinated. Adding that to the equation, it might be easier to enforce the current policy.
