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Rio Tinto faces even heavier weather

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A man with an umbrella crosses a road in central Sydney February 6, 2010. REUTERS/Tim Wimborne

MELBOURNE, July 16 (Reuters Breakingviews) - When it rains it pours. Australian miner Rio Tinto (RIO.AX), (RIO.L) on Friday partly blamed a tropical cyclone for a 12% decline in iron ore shipments, to about 76 million tonnes, in the second quarter from a year earlier. Tight labour markets, Covid-19 disruptions and renewed efforts to protect Indigenous heritage sites also caused problems and are lifting production costs. Newish boss Jakob Stausholm now expects iron ore exports to be at the lower end read more of an earlier annual guidance of 325 million to 340 million tonnes. The company shipped 331 million tonnes in 2020.

Soaring prices for the steel-making ingredient – nearly triple what they were at the start of 2019 – mean there will be plenty of cash for shareholders this year. The winds may start changing on that front, however. Brazilian production is ramping up again while China is actively seeking ways to push commodity prices down. For Stausholm, who was hired last year following a governance debacle, there may be little shelter from the storm. (By Jeffrey Goldfarb)

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Editing by Robyn Mak and Katrina Hamlin

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