July 18, 2017 / 10:40 AM / in 6 months

Rio cuts 2017 iron ore guidance as rail work hits shipments

(Reuters) - Rio Tinto lowered its forecast for shipments of iron ore in calendar 2017 by up to 10 million tonnes on Tuesday citing bad weather and ongoing work to modernize its rail lines.

Iron ore shipments were expected at 330 million tonnes, down from an earlier forecast of 330 million to 340 million tonnes, the world’s number two producer said in its second-quarter production report.

“Iron ore shipments were impacted by an acceleration in our rail maintenance program following poor weather in the first quarter,” Chief Executive Jean-Sebastien Jacques said.

Second-quarter iron ore shipments from Australia fell 6 percent from a year ago to 77.7 million tonnes, slightly below analysts’ forecasts as Rio Tinto transitions to a driverless train network.

First-half shipments totaled 154.3 million tonnes, indicating the company expects to pick up shipments in the remaining two quarters.

Second-quarter production from its Australian mines fell 1 percent to 79.8 million tonnes, Rio Tinto said.

In other minerals, Rio Tinto cut its full-year production target for hard coking coal to 7.2–7.8 million tonnes following a 14 percent fall in second-quarter production after a cyclone that swept across its collieries earlier this year.

In copper, output for the quarter fell 6 percent to 124,700 tonnes but Rio said it would stick to its annual target of 500,000 to 550,000 tonnes.

Reporting by Shashwat Pradhan in Bengaluru; editing by Richard Pullin and Jason Neely

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