Rio Tinto expects inflation and lower production from its Pilbara iron ore mines to push costs to the upper end of 2024 guidance, as it navigates the impacts of rainfall and slow approvals.
Rio Tinto expects inflation and lower production from its Pilbara iron ore mines to push costs to the upper end of 2024 guidance, as it navigates the impacts of rainfall and slow approvals in the region.
Rio’s production from its Pilbara assets fell by 1 per cent year-on-year to 328 million tonnes, a minor drop attributed to depletion at the Paraburdoo mine and higher than average Pilbara rainfall in the final quarter, compared against 2023.
“Mine productivity mostly offset depletion and higher than average rainfall, which was more than five times historical levels,” Rio said of its Pilbara operations.
“As a result, mine stocks were drawn down, with operations in the first quarter of 2025 to focus on recovering pit health.”
Rio did not release its cash costs for production but warned that they were expected to sit in the upper half of the $US21.75-US$23.50 per tonne range outlined for the financial year.
“This is due to inflation being at the higher end of our expectations, and lower production,” Rio wrote.
Rio sold its iron ore at an average free on board price of US$89.60 per tonne in 2024, down from US$99.70/t a year earlier.
The amount of SP10 lump product – a lower grade output which sells for less at market – increased 86 per cent year-on-year to 22.6 million tonnes.
Iron ore is typically priced at a 62 per cent iron grading, with premiums and discounts on offer for ore on either side of the standard.
Lower grade SP10 exports accounted for 25 per cent of all Pilbara iron ore shipments in the December quarter, the highest of any quarter last year.
Rio suggested this was a symptom of timing and approvals for planned mining areas.
“SP10 levels are expected to remain elevated until replacement projects are delivered,” it said.
“We are reviewing our future product strategy, having regard to customer requirements and available ore grade.”
The company held its guidance steady for the 2025 calendar year, setting a 323-338Mt range.
“Pilbara iron ore guidance remains subject to the timing of approvals for planned mining areas and heritage clearances,” it said.
Rio will bring its Western Range iron ore project into production this year.
The Rhodes Ridge project, which Rio hopes to have in production by the end of the decade, is currently before state and federal regulators.
At the same time, the company is developing the globally significant Simandou iron ore project alongside its joint venture partners in Guinea, where it also expects to begin production this year.
In other commodities, Rio increased its copper production by 13 per cent year-on-year, as it ramped up the Oyu Tolgoi underground project in Mongolia and increased output from the Escondida mine in Chile.
Rio signed a term sheet to team up with Sumitomo over the Winu copper-gold project in the Pilbara in December and intends to develop and operate the project as a managing partner in the JV.
It hopes to finalise the partnership in the first half of this year.
Rio shares rose slightly in early trade, to $119.61 per share.
