Rio Tinto has pared back expectations for its full-year iron ore shipments as ongoing maintenance work slows its ability to export the steel making ingredient.
The world’s second largest iron ore exporter now expects 2017 iron ore shipments to be at the low end of its previous guidance of between 330 and 340 million tonnes.
Shares in the company skidded on the news, down 1.6 per cent at $64.90 at 1510 AEST.
“Investors are factoring in the lower guidance for iron ore and coking coal and that seems to be weighing on the stock,” Morgans analyst Adrian Prendergast said.
“However, iron ore prices are stronger than people predicted and that should be a driver for the company’s earnings.”
The revision comes after June quarter shipments from its Pilbara iron ore operations slipped six per cent from a year ago to 77.7 million tonnes because of rail track maintenance work.
Mr Prendergast said the impact of rail maintenance had been expected to be spread over several quarters, but seemed to be more skewed towards the June quarter.
Production of iron ore was nearly steady in its second quarter, down just one per cent from a year ago to 79.8 million tonnes.
The mining giant had already made a sluggish start to the year, with first quarter shipments and production affected by bad weather.
Rio said its revised shipments target took into consideration first half production and further rail maintenance in the second half of the year.
“Further rail maintenance will continue throughout the remainder of 2017, albeit at a lower level than in the second quarter,” the company said in a statement.
Guidance for hard coking coal production in 2017 was cut to 7.2 to 7.8 million tonnes, from the previous forecast of 7.8 and 8.4 million tonnes, after June quarter output declined 14 per cent due to the impact of Cyclone Debbie.
Rio’s copper production fell six per cent to 124,700 tonnes in the June quarter, as operations at its jointly-owned Escondida mine in Chile gradually ramped up following a 43-day labour strike, while output remained curtailed at the Grasberg mine in Indonesia.