By Geoffrey Smith
Investing.com -- Shares in Rio Tinto (ASX:RIO) (LON:RIO) slipped on Wednesday after the mining giant published conservative output forecasts for 2023, with no increase expected in production at its key Pilbara iron ore mine in Western Australia.
Rio said it expects output from Pilbara, which largely feeds industrial demand in China, to stay in a range between 320 and 335 million tons next year. Cash production costs at the mine are expected to be around $21-$22.5 a ton. Output of pellets, the key intermediary product, is seen rising a little over 2% to around 10.75M tons.
Iron ore prices have largely returned to pre-pandemic levels in recent months, after spiking in response to a wave of global fiscal and monetary stimulus during 2020.
The company also indicated that it expects to mine more copper ore next year, but lower grades will result in a small drop in the output of refined copper. It expects mined copper to rise to a range around 575,000 tons, up from between 500,000 and 575,000 tons this year. However, the midpoint of its range for refined output is set to drop to 195,000 tons from 205,000 this year. It expects its cash costs for Copper to be in a range around $1.70 a pound.
By contrast, the company expects its production of primary Aluminum to rise around 5% to 3.20M tons.
Rio has made copper a strategic priority in the coming years, owing to its central place in the electric mobility revolution. It expects electrification to add 25% to global demand by 2035, and the company has earmarked up to $3B a year for investment in projects such as the Tolgoi copper mine in Mongolia and the Rincon lithium project in Argentina.
The company also said it expects diamond output to fall by nearly 30% next year to a range around 3.4M carats.
By 03:40 ET (08:40 GMT), Rio Tinto stock was down 1.1%, underperforming both the FTSE 100 index and most European metals and mining stocks.