Aboriginal traditional owners continue to put pressure on Rio Tinto over their conduct on previous mining expeditions
Rio Tinto (LON:RIO) is struggling to reach its full-year guidance for its iron ore operations as a weather conditions, a shortage of labour and ongoing cultural heritage management issues dragged on the miner’s performance.
The FTSE 100 miner confirmed in its quarterly update on Friday that it exported 76.3m tonnes of iron ore, a fall of 12% compared to the same quarter twelve months ago.
The largest iron ore producer in the world is now expecting to deliver close to the lower end of its 325m-340m tonnes range in 2021.
Production for the quarter was held back by rainfall in the West Pilbara region, in addition to Covid-induced labour shortages.
Rio Tinto also lost 2m tonnes of iron ore production as it moved buffers and exclusion zones in order to protect areas of “cultural significance”.
Aboriginal traditional owners continue to put pressure on Rio Tinto over their conduct on previous mining expeditions.
The Financial Times reported that analysts believe Rio will announce a large dividend payment of about $8bn when it reports H1 results this month.
Rio Tinto Chief Executive Jakob Stausholm, commented: “The global economy, in particular China, recovered strongly and we are intensely focused on servicing our customers with as much product as we can. However, we faced some challenges in the first half notably at our Pilbara operations, which were impacted by replacement mine tie-ins and materially higher rainfall.”
“Heightened COVID-19 constraints, which resulted in numerous travel restrictions, added further pressure on the business and limited our ability to access additional people, particularly in Western Australia and Mongolia, in order to deliver operational improvements or maintenance initiatives and accelerate projects.”
Stausholm believes that despite some concerns over performance, the FTSE 100 company’s priorities will serve to benefit shareholder returns over the long-run.
“Our first half performance has reaffirmed my belief that we have identified the right priorities to strengthen the business: to become the best operator, strive for impeccable ESG credentials, excel in development and secure a strong social licence,” Stausholm said.
“We have made initial progress against our priorities, but a large volume of work remains to make Rio Tinto even stronger, so we can continue to deliver superior returns to shareholders, invest in sustaining and growing our portfolio, and make a broader contribution to society.”
The Rio Tinto share price is down by 1.42% during the morning session on the London Stock Exchange.
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