Global mining giant Rio Tinto reported second-quarter iron ore shipments below analyst estimates on Tuesday, reflecting the impact of a train derailment in mid-May on its production.
Rio Tinto shipped 80.3 million tons (Mt) of iron ore from its Pilbara operations in the three months ended June 30. This was 3% higher than the previous quarter’s 78 Mt but below the Visible Alpha consensus estimate of 82.1 Mt.
The company said a train derailment at its Western Australia iron ore operations in May led to around six days of lost rail capacity, contributing to the lower-than-expected shipments.
Rio’s Australia shares fell as much as 2.6% to A$116.75 in early trade, hitting their lowest since March 18. The stock was last down 1.8% at A$117.64.
Despite the shipment miss, Rio Tinto reaffirmed its annual iron ore shipments forecast of between 323 and 338 Mt. The company said economic conditions in top iron ore consumer China are still being supported by a recovery in manufacturing operations and more resilient exports, though housing activity remains weak.
Jefferies analysts expect Chinese steel production to remain resilient, which could bode well for Rio’s shipments and production in the coming quarters, even as they do not expect Chinese steel exports to remain at multi-year highs.
Rio Tinto also flagged possible delays at its greater Nammuldi iron ore project, part of its next tranche of mine replacements. The company lowered its annual alumina production estimates due to reduced operation rates at its Gladstone operations in Queensland.
Overall, the train derailment in May had a notable impact on Rio Tinto’s iron ore shipments in the second quarter, leading to the miss against analyst estimates.