The Rio Tinto Ltd (ASX: RIO) share price is under the spotlight today after the ASX miner revealed its quarterly production.
Rio Tinto’s Q2 production numbers
Rio Tinto has revealed its operational performance for the three months to 30 June 2024.
It reported 79.5mt of iron ore production, which was down 2% year on year, but up 2% compared to the first quarter of 2024. Productivity gains offset ore depletion, but it lost six days of rail capacity from a rail collision in mid-May.
After the end of the quarter, all conditions were satisfied for Rio Tinto’s investment to develop Simandou, the large high-grade iron ore deposit in Guinea.
The ASX mining share produced 14.7mt of bauxite, up 9% year on year and up 10% quarter on quarter thanks to the implementation of the ‘Safe Production System’ where it achieved higher plant utilisation and feed rates.
Aluminium production came to 824kt, up 1% year on year and flat quarter on quarter. Its smelters are “continuing to demonstrate stable performance during the period.”
Mined copper production was 171kt, up 18% year on year and up 10% quarter on quarter. Kennecott saw 30% higher production because of a conveyor outage in the prior period. Escondida production was 12% higher thanks to an improvement in concentrator feed grade as mining continued into higher grade zones, together with 12% higher concentrator output. Oyu Tolgoi production, up 23% year on year, continued to see a ramp-up of underground production.
Titanium dioxide slag production came to 238kt, down 22% year on year and down 6% quarter on quarter.
Iron Ore Company of Canada pellets and concentrate production was 2.2mt, up 6% year on year but down 16% quarter on quarter.
Management commentary
Rio Tinto Chief Executive Jakob Stausholm said:
Our operational performance continues to progress. While there are still significant improvements ahead, we are beginning to see a step-change in production, including from our Queensland bauxite business following the roll-out of the Safe Production System.
We are growing with discipline in the materials the world needs for the energy transition. Construction of the Simandou high grade iron ore project in Guinea is advancing at pace, the ramp up of the Oyu Tolgoi underground is on track and we are set to achieve first production from the Rincon starter plant by the end of the year.
We continue to prioritise the decarbonisation of our business, announcing the installation of carbon free aluminium smelting cells using ELYSIS technology at our Arvida smelter in Quebec and an investment in a R&D facility to test our low-carbon ironmaking process, BioIron, in Western Australia. We also signed 20-year electricity arrangements backed by renewable electricity to secure the future of the Tiwai Point aluminium smelter in New Zealand.
Final thoughts on the Rio Tinto share price
Considering the train problems for the iron ore segment, I thought this was a solid performance by the miner, particularly with the growth of its copper production.
The outlook for the copper price is promising in a decarbonising world, and Rio Tinto is doing the right things to take advantage of it.
I think Rio Tinto is a better business than it was a few years ago and the Rio Tinto share price is cheaper than a few months ago. However, it doesn’t look amazing value to me – I’d want to see it drop at least 10% (to $108, or even more) before buying it to try to beat the market.
For now, there are other ASX dividend shares I’d rather buy.
