Rio Tinto Anticipated its Iron Ore Shipments for 2024 from the Western Australia

Rio Tinto, the UK-Australian mining giant, recently projected that their iron ore shipments for 2024 from Western Australia (WA) would be between 323mn to 338mn tons. This is in contrast to their 2023 target, which lies between 328mn to 335mn tons. Interestingly, a larger proportion of the output consists of low-grade ore.

The company has highlighted a significant increase in its low-grade SP10 products, estimating that it could represent 13-15% of all their WA iron ore sales in 2023. This would translate to around 45mn to 50mn tons, which denotes a rise from the previous year when it constituted 11% or 35.42mn tons. The latter half of 2023 is expected to see a particular surge in SP10 sales, accounting for 10% of the total sales for the first half of that year. If this trend persists, 2024 could see SP10 forming an even larger fraction of the company's sales.

Simon Trott, Rio Tinto's chief executive of iron ore, mentioned during a recent site visit that the company needs to find more high-grade replacement mines in the Pilbara region to improve the average quality of their sales from WA. This would also enable them to move closer to their mid-term goal of shipping between 345mn to 360mn tons. However, they face hurdles due to the prolonged approval processes for new mines in WA, which have increased to approximately four years from the previous three in 2018 and two in 2003.

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The company is reportedly studying the potential of the Rhodes Ridge joint venture, which Trott considers to be the most promising undeveloped project in the Pilbara. Once this venture is operational by the decade's end, it's believed that the Pilbara Blend might constitute over 85% of the company's shipments from WA. This is a notable rise from the 63% recorded in the preceding two years.

Rio Tinto's emphasis on higher-grade iron ore aligns with their decarbonisation ambitions. However, they are also collaborating with Chinese steel producer Baowu, aiming to establish a low-carbon route for processing low to medium-grade iron ores.

The mining firm is expected to release its quarterly production data for July to September on 17 October. To meet the minimum of their revised 2023 projection, they need to dispatch 166.3mn tons during the second half of the year, which surpasses the 161.7mn tons recorded for the first half. To achieve the upper limit of their guidance, they must ship at least 173.3mn tons, a figure higher than the 170.3mn tons transported in the latter half of 2022.

According to the article by Procurement Resource, Rio Tinto predicts its 2024 iron ore shipments from Western Australia to be 323mn-338mn tons, differing from 2023's 328mn-335mn tons target. The company is producing more of the low-grade SP10 products, which could comprise 13-15% of 2023 sales. They are seeking high-grade mines in Pilbara but face long approval processes. The potential Rhodes Ridge venture might dominate their shipments. While focusing on high-grade ores for decarbonization, they're also partnering with China's Baowu for a low-carbon process. Their July-September production data will be released on 17 October.