The Rio Tinto Limited (ASX: RIO) share price is down after the ASX mining share released its first quarter update.
Every three months, Rio Tinto told investors how much of its commodities that it produced. There are two parts to the company’s profit – how much it produces and what price it gets for the commodities.
Rio Tinto’s 2022 first quarter
The mining giant reported that it produced 71.7mt of iron ore from Pilbara. This was a year-on-year reduction of 8%. Compared to the fourth quarter of 2021, the production was down by 15%.
The company said that ongoing mine depletion was not offset by mine replacement projects, with delayed commissioning of Gudai-Darri – the first ore is still forecast for the second quarter of 2022. There is also ongoing commissioning challenges at the Mesa A wet plant continuing to impact production ramp-up at Robe Valley.
Rio Tinto also blamed COVID-19 which impacted labour supply as it experienced increased cases on-site in the Pilbara after the WA border reopening in March.
However, it’s expecting increased production volumes and an improved product mix in the second half.
Iron ore full-year shipments guidance remained unchanged.
Other commodities
Rio Tinto also told investors how its production went for its other commodities.
Bauxite production was flat year on year at 13.6mt.
Aluminium production was down 8% year on year to 736kt.
Mined copper production was up 4% year on year to 125kt.
Titanium dioxide slag production was down 2% year on year to 273kt.
Iron Ore Canada (IOC) iron ore pellets and concentrate production was up 3% to 2.4mt.
Other highlights
Rio Tinto pointed to other highlights from the quarter. Oyu Tolgoi is one of the largest known copper and gold deposits in the world. It said it made notable progress with the commencement of underground mining at Oyu Tolgoi after a comprehensive agreement was reached with the Government of Mongolia.
It also completed the acquisition of the Rincon lithium project in Argentina and signed a framework agreement at the Simandou iron ore project in Guinea.
Its copper and lithium mines are focused on decarbonisation of the world.
Final thoughts on the Rio Tinto share price
The ASX mining share giant has disappointed investors today. However, commodity prices remain elevated. Decarbonisation and short-term Chinese policies are expected to help demand for its resources. However, recent input cost increases are the largest raw material cost hike since 1973, according to Rio Tinto.
I think Rio Tinto is making the right moves, but I’m not sure if today is the best time to buy with how strong the iron ore price has been.
