Rio Tinto released production data for the first quarter of 2025. While the company achieved record production at its Oyu Tolgoi copper mine and bauxite segment during the quarter, iron ore operations in the Pilbara region were severely impacted by weather conditions. Four cyclones in the first quarter resulted in production losses of approximately 13 million tons. An AUD 150 million investment plan has been put in place to offset half of this loss.
Despite the decline in iron ore production, Rio Tinto reported first ore from the Western Range project in the Pilbara and work continued on schedule at the Simandou high-grade iron ore project in Guinea. Following the acquisition of Arcadium, which was completed in March, efforts accelerated in line with the goal of establishing a global business line in the lithium segment.
Decline in Shipments, Increase in Port Sales
Pilbara iron ore shipments shaped up to remain at the lower end of guidance, with lower volumes and upgrading costs partially offset by a weaker Australian dollar. The SP10 grade segment accounted for 29% of Pilbara shipments during the quarter.
Port-based sales to China increased year-on-year to 8.6 million tons. 91% of sales went through blending or screening at Chinese ports. Port stocks stood at 6.4 million tons at the end of March.
Market Developments and Pricing
Although China's crude steel production fell by 2% qoq, annualized output remained above 1 billion tons. In the same period, China's overseas iron ore imports decreased by 9%. Approximately 10% of the company's sales were priced with a one-month lag compared to the previous quarter's average, while the remaining sales were realized based on current indices and spot market prices.
The company said it is in the process of evaluating its iron ore product strategy and is working with customers on the highest value product mix.
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