Australian Mining Review - February (2022)

See story on the lower half of page 14 (bottom left when that link opens). FMG are also working on a similar project with Williams Advanced Engineering (WAE), who they've just agreed to acquire. Good to see these companies getting on with reducing greenhouse emissions and saving themselves a heap on their own future diesel bills.

Source: Australian Mining Review

Disclosure: I do not hold RIO shares, but I do hold FMG shares.

Rio is holding up well actually.  A lot of their share price movements will mirror movements in the iron ore spot price - as can be seen below - for the past couple of weeks (right side of each graph).  Rio's SP is on the left, the iron ore price is on the right.  When the market realises that the current high iron ore price is not sustainable - partly due to Brazil's Vale iron ore production recovering eventually - then we'll see lower price levels for RIO, FMG and BHP, in my opinion.  I am not invested in them at this point.

22-Feb-2021:  https://www.australianmining.com.au/news/shortage-in-global-iron-ore-supply-to-stay-rio-tinto/

Shortage in global iron ore supply to stay: Rio Tinto

by Nickolas Zakharia

Rio Tinto is anticipating another strong year for iron ore in 2021 due to sustained demand from steel producers.

According to Rio Tinto’s annual report for 2020, steel producers will ramp up their production off the back of global supply constraints, cementing demand for Rio Tinto’s iron ore.

Rio Tinto produced 333.4 million tonnes of iron ore products in 2020, compared with 326.7 million tonnes in 2019.

Shipments were also up from 37.4 million tonnes in 2019 to 330.6 million tonnes in 2020.

The company generated $US27.5 billion ($35 billion) in gross iron ore product sales in 2020, up from $24.1 billion in 2019.

Rio Tinto chief executive Jakob Stausholm said the company’s strong response to COVID-19 had steered it into a healthy position.

“I am exceptionally proud of the way we responded, as one, to the global COVID-19 pandemic: our goal was to keep our employees, contractors and communities safe and healthy while keeping our operations running and continuing to deliver the products our customers need,” he said.

Stausholm said that sustainability across its business was a “sharp focus” in the years ahead.

After last year’s Juukan Gorge disaster, Rio Tinto has committed itself to earn the trust of Traditional Owners.

The company is also planning to tackle climate change after setting scope three emissions reduction goals this year.

“We consider climate change the key challenge of our generation, and have pledged to address our own emissions, and those of our value chain,” Stausholm said.

“…We will work with customers on steel decarbonisation pathways and invest in technologies that could deliver at least a 30 per cent reduction in steelmaking carbon intensity from 2030.”

Rio Tinto operates 16 iron ore mines in Western Australia and employs 13,600 people across its Pilbara operations.

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I do not hold RIO, BHP or FMG shares.  I am wary of iron ore because I think the price will decline once Vale gets back to full production in Brazil.  However, if I was looking for iron ore exposure, I would either do it via FMG or MIN, not via RIO or BHP.  RIO's view of likely iron ore demand through CY2021 is interesting nonetheless.