Rio Tinto forecasts 2022 iron ore shipments on Tuesday to be slightly weaker than expected, citing tight labor market conditions and production delays from the new zero-quarry at the Gudai-Darri project.
The world's largest iron ore producer said it expects to ship between 320 million and 335 million tons (Mt) in 2022 from the Pilbara region in Western Australia.
Rio shipped 321.6 Mt of steelmaking commodities last year, down 3% from 2020.
Shares of the global miner fell as much as 1.9% to A$107.91, but reversed course and traded marginally higher as at 0117 GMT.
In addition to the delay in the production of the new zero mine, labor shortages in Western Australia due to prolonged border closures due to the pandemic have also resulted in reduced iron ore shipments from the Pilbara region.
"Rio Tinto's operations continue to be volatile and mine capacity issues in iron ore are likely to gain weight again in 2022, despite an already reduced projected production profile," RBC Capital Markets analysts wrote in a note.
"Although iron ore prices have given stocks some solace in recent weeks, we continue to see a challenging outlook for iron ore through 2022."
While Rio said he was "encouraged" by growth prospects in 2022, he warned that potential disruptions from rising COVID-19 cases and any geopolitical tensions could hurt.
"The guide assumes that the development of the pandemic has not led to government-enforced restrictions and widespread long-term cases," the miner said in a statement.
"This risk is exacerbated globally due to tight labor markets and supply chain delays."
China's debt-ridden real estate sector also poses some risk as construction activity dampens demand for raw materials, including iron ore, whose prices have nearly halved from their May peak last year.
Meanwhile, the global miner was planning to halt similar work in western Serbia amid protests from green groups around the country, even as it was setting up its battery materials business with a recent purchase of the Rincon lithium project in Argentina.
The iron ore producer shipped 84.1 Mt of commodities in the three months ended December 31, roughly in line with UBS's estimate of 84 Mt, beating RBC's estimate of 82.6 Mt.
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