IGO suspends annual dividends from Tianqi JV amid market downturn
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Global miner Rio Tinto said on Wednesday it had started delivering iron ore from its Gudai-Darri mine in Western Australia, as it seeks to boost overall production volumes.
The capital cost of the mine, which is expected to have a life of over 40 years, is estimated to be $3.1 billion. Production from the mine will continue to increase through the remainder of this year and is expected to reach full capacity in 2023, the company said in a statement.
“The commissioning of Gudai-Darri represents the successful delivery of our first greenfield mine in over a decade, helping to support increased output of Pilbara Blend, our flagship product,” Rio Tinto Iron Ore Chief Executive Officer Simon Trott said.
To support its carbon emissions reduction targets, Rio Tinto said the mine will be powered by a 34 megawatt solar farm that is expected to meet about a third of the mine’s average electricity demand once construction completes in August.
Rio shares rose as much as 1.5% to A$112.66 on the Australian bourse, marking their best intraday percentage gain since June 8, after the announcement.
“We expect increased production volumes and improved product mix in the second half with the commissioning and ramp up of Gudai-Darri,” RBC Capital Markets said in a note.
The Anglo-Australian mining giant had said in February that its replacement projects in the Pilbara, including Gudai-Darri, were subject to potential capital increases of approximately 15% due to ongoing COVID-19 restrictions, including labour access and supply chain quality issues.
Group capital expenditure guidance for 2022, however, is unchanged at around $8 billion, Rio added.
Rio reported lower-than-expected iron ore shipments in the first quarter and warned of risks from sustained high inflation, a resurgence of Covid-19 lockdowns in China and a prolonged Russia-Ukraine war.
($1 = 1.4476 Australian dollars)
(By Praveen Menon and Tejaswi Marthi; Editing by Vinay Dwivedi and Rashmi Aich)
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