Rio Tinto & BHP Billiton Trims Iron Ore Production Guidance

BHP Billiton cuts production guidance by 10 MnT

BHP Billiton, the third largest iron ore producer has lowered its production guidance for the second time in this financial year. The miner expects to produce around 260 MnT in FY16 from 270 MnT previously estimated.

This cut in production is because of bad weather, logistical issues and Samarco disaster in Brazil. Production volumes were offset by suspension of operations at Samarco due to bursting of dam, causing an environmental disaster.

In its recent 3rd quarter update,the miner produced 53 MnT of iron ore at its Western Australia Iron Ore (WAIO) operations. Production fell by 10% Q-o-Q.

The miner sold 13.38 MnT iron ore lumps and 40.08 MnT fines in the Q3 FY16 which was 12.62 MnT lumps and 42.64 MnT fines in the Q3 FY15. However, iron ore sales of first nine months of FY16 totalled at 165.8 MnT.

Note: BHP Billiton follows Australian financial year FY16 from 1 July 2015 to 30 June 2016.

Rio Tinto cuts production guidance for 2017

Australian miner, Rio Tinto cuts its production guidance for 2017. The miner expects to produce around 330-340 MnT iron ore in 2017, down from 350 MnT previously estimated. It maintained its 2016 target at 350 MnT however.

In its recent report of Q1 2016, the iron ore shipments remained at 80.8 MnT while output was 84 MnT in Q1 2016. Iron ore shipments were down by 12% from the December quarter, while output was down 4% over the same period.

The company announced the extension of the Channar Mining Joint Venture in the Pilbara with Chinese Sinosteel last week. The extension, together with another supply agreement, will enable sales of up to 70 MnT of iron ore to Sinosteel over the next five years, according to the report.