The Rio Tinto Limited (ASX: RIO) share price is under the microscope after the iron miner released its 2022 third-quarter update.
2022 Q3 update
Rio Tinto told investors that it produced 84.3mt of iron ore from Pilbara. This was an increase of 1% year over year and a 7% increase compared to the second quarter of 2022.
Bauxite production for the quarter was 13.7mt, down 2% year on year.
Aluminium production was down 2% year on year to 759kt.
Mined copper production was 138kt, up 10% year on year.
Titanium dioxide slag of 310kt was an increase of 48% year over year.
Iron Ore Company of Canada (IOC) iron ore pellets and concentrate saw production of 28% to 2.8mt.
Joint venture update
The company also announced that it was going to “modernise” its joint venture to develop the Rhodes Ridge iron ore porject.
For context, this is a project in East Pilbara in Western Australia where Rio Tinto owns 50% and Wright Prospecting (Gina Rinehart) owning the other half.
This project was described by Rio Tinto as one of the world’s “largest and highest-quality undeveloped iron ore deposits.”
The agreement updates the existing agreement between the two parties, dating back to 1972 and now provides a pathway for the development of the Rhodes Ridge deposits utilising Rio Tinto’s rail, port and power infrastructure.
The participants have commenced a study which will consider the development of an operation before the end of the decade with initial plant capacity of up to 40 million tonnes annually, subject to approvals.
Rio Tinto noted that Rhodes Ridge contains 5.8 billion tonnes of “high grade” mineral resources at an average grade of 62.3% Fe. The project’s total resource, 6.7 billion tonnes at an average grade of 61.6% Fe, represents approximately one third of Rio Tinto’s existing resource in the Pilbara region.
Management comments
The Rio Tinto iron ore chief executive Simon Trott said:
We are very excited we have been able to strengthen our relationship with Wright Prospecting and have a pathway to bring this high quality resource to market.
With its significant resource base, the Rhodes Ridge project has the potential to underpin production of the Pilbara Blend in the decades ahead.
Final thoughts on the Rio Tinto share price
Rio Tinto shares have drifted lower in recent times. I think the iron ore miner could be worth buying, particularly for its other commodities of aluminium, lithium and copper.
I think the business can continue to be a good source of dividends for many years to come, even if the iron ore price stays lower for longer.
With the Rio Tinto share price down more than 20% since the 52-week high, this could be an opportunistic time to buy shares.
