Rio to ship more low-grade iron as mine approval times blow out
Rio Tinto has warned it will need to ship more low-grade iron ore over the next few years as it grapples with bringing its next generation of Pilbara mines in Western Australia into production.
The mining giant revealed its quality issues on Monday during an investor tour of the iron ore operations that provide the lion’s share of its earnings. The update is also a blow to Rio’s decarbonisation ambitions, where it is generally accepted that higher-grade ore produces lower emissions in steel making.
Rio iron ore boss Simon Trott: “As the steel industry decarbonises these deposits are set to provide us with the resource options that we need to respond to whatever direction the future steel industry takes.” Rio Tinto
Rio iron ore boss Simon Trott said mining approval times in WA had blown out by 12-18 months since 2018, in a reflection of the greater emphasis on environmental, social and governance standards. The average environmental approval time is four years, according to Rio.
The business also had to reset its relationships with traditional owners after drawing consternation over its destruction of 46,000-year-old rock shelters at Juukan Gorge in May 2020. Indigenous heritage approvals in WA remain in limbo after the state’s Labor government scrapped laws it rushed through parliament in the wake of Juukan Gorge.
Rio’s shipping guidance for 2023 is unchanged at the upper end of the 320-335 million tonne range, but those shipments will include 45-50 million tonnes of lower grade iron ore it refers to as SP10 product. The percentage of lower grade product is higher than forecast, in part because Rio has faced delays in gaining access to some mine areas.
Unit cost guidance for the Pilbara operations is intact at $US21
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