The ASX-listed Rio Tinto Limited (AU:RIO) reported a robust performance in its Q3 production report, beating forecasts for the majority of its commodities. This positive outcome pushed the shares higher, closing with a 1.2% gain on Tuesday.
Rio Tinto’s management expressed satisfaction with the Q3 numbers, highlighting significant progress in its operations. The company remains optimistic about its Pilbara iron ore operations, high-grade underground copper mine at Oyu Tolgoi, and Kitimat aluminium smelter, which will drive more growth for the company in the future. The company also confirmed its guidance numbers for the full year for all its commodities except IOC iron ore pellets.
Rio Tinto stands as a well-known mining company involved in the exploration, extraction, and processing of minerals. The company currently owns a portfolio of eight commodities and has operations in around 18 countries.
Q3 Numbers
The company’s iron ore shipments from Pilbara increased by 6% to 83.9 million tonnes as compared to the numbers reported in the previous quarter. Pilbara iron ore production was up by 3% to 83.5 million tonnes. Last week, the company also revised its outlook for iron ore shipments from Pilbara, anticipating a range of 323 million to 338 million tonnes for the fiscal year 2024. For 2023, the shipment guidance remains the same within the range of 320 million to 335 million tonnes.
The aluminium production witnessed an increase of 2% from the previous quarter but was up by 9% as compared to the third quarter of 2022. This was mainly driven by full-scale operations at the Kitimat smelter in Canada. In Q3, the company reported 169 million tonnes of copper production, marking a solid growth of 17% over the last quarter. Rio experienced positive outcomes from the ongoing production scale-up at the high-grade underground mine at Oyu Tolgoi.
The company’s expenditure on exploration increased to $613 million for the first nine months of FY23, up from $506 million a year ago.
Is Rio Tinto a Buy or Hold?
After the Q3 update, analysts have expressed mixed opinions on the stock. Today, analysts Hayden Bairstow from Macquarie and Lachlan Shaw from UBS reiterated their Hold ratings on the stock, predicting a modest downside to the share price.
On the contrary, Citi analyst Paul McTaggart kept his Buy rating on the stock, predicting a growth of 5.6% in the price.
According to TipRanks, RIO stock has received a Moderate Buy rating based on a total of 11 recommendations, of which six are Buy. The RIO share price forecast is AU$122.65, which is 4.47% above the current trading level.
In the last 12 months, the stock has gained 31% in trading.
