(This Jan. 17 story has been refilled to correct figures in 12th para to 550,000-600,000)
(Reuters) - Global miner Rio Tinto on Friday logged a slight drop in quarterly iron ore production in December and said it expected to produce more iron ore in 2019 in a target range that was at the lower end of analyst expectations.
Mined copper production beat its guidance, mostly due to higher grades and better productivity at Rio Tinto’s Kennecott operations in the Utah, the company said in a statement.
Rio’s fourth-quarter iron ore production stood at 86.6 million tonnes, down by 1 percent from the fourth quarter of 2017, due to fewer shipments.
Meanwhile its outlook for iron ore production for this year, was in a range of 338 million tonnes to 350 million tonnes, making a Vuma consensus of 348.8 million tonnes at the top end of its guidance.
The world’s No. 2 miner of the steelmaking material declared force majeure on iron ore shipments to some customers following a fire at its Cape Lambert export terminal in Australia earlier this month.
Combined, global miners are expected to have shipped out less iron ore in the last quarter of 2018 than in 2017, however buoyant iron ore prices are expected to drive a solid season for earnings.
“You’d have to say it’s a pretty good result. It’s not shooting the lights out, but given the economic background, you can’t really complain too much,” said analyst David Lennox at Fat Prophets in Sydney.
Shares in Rio rose 0.5 percent to A$80.81 ($58.08) by 2312 GMT.
Rio’s 2018 iron ore shipments from Australia’s Pilbara region totaled 338.2 million tonnes, up 2 percent from 330.1 million tonnes the year before on the back of productivity gains, in line with a Vuma consensus of 339.2 million tonnes.
The Anglo-Australian miner had given guidance of 330 million to 340 million tonnes.
In November, Rio officially bankrolled a $2.6 billion futuristic iron ore mine in the resource-rich Pilbara region, aiming to cash in on the rising Chinese demand for finer ore.
“We delivered a solid operational performance in the final quarter of 2018, in particular across our copper assets,” Chief Executive Officer Jean-Sebastien Jacques said.
For 2018, the London-headquartered miner posted a 33 percent jump in mined copper production to 633,500 tonnes, beating its guidance of between 510,000-610,000 tonnes. It set a 2019 target to churn out between 550,000 tonnes and 600,000 tonnes of mined copper.
The solid outlook for copper coupled with Rio’s desire to reduce its reliance on iron ore has prompted the miner to boost its copper assets.
Inflation of raw materials costs that negatively impacted its aluminum business in the first half of the year continued into the second half, it noted.
Rio’s quarterly iron ore shipments from the Pilbara fell 3 percent to 87.4 million tonnes in the quarter ended Dec. 31, 2018.
($1 = 1.3914 Australian dollars)
Reporting by Aditya Soni in Bengaluru and Melanie Burton in MELBOURNE; Editing by Toby Chopra and Stephen Coates