* Iron ore production up 2.4% in Q1 despite cyclone
* Iron ore shipments up 5%, miss analyst expectations
* Miner slashes refined copper output estimate by about 20%
(Recasts, adds broker comments, other details)
MELBOURNE, April 17 (Reuters) - Rio Tinto Ltd RIO.AX RIO.L reported higher-than-expected iron ore production for the first quarter on Friday, boosting its shares, but cut its forecast for annual copper output citing disruptions due to the coronavirus.
The strong iron ore output comes despite a cyclone tearing through Rio Tinto's Western Australian operations in February, which had prompted it to downgrade its outlook for shipments from the Pilbara region. Tinto, the world's top iron ore miner and first among majors to report, retained its annual output guidance for the steelmaking ingredient and said it was on track with projects for replacement tonnes despite coronavirus-led disruptions.
The result was "better than expected" considering "the damage caused by a direct hit from Tropical Cyclone Damien in February", analysts at Jefferies said. The brokerage has a buy rating on Rio Tinto shares. iron ore prices and low production costs are allowing the miner to build up strong cash flow following a tough first-half last year, it said.
"In light of its high dividend yield, exposure to iron ore, strong balance sheet, and inexpensive valuation, Rio is our top pick in US/UK mining," it said.
Iron ore production for the Anglo-Australian miner stood at 77.8 million tonnes for the first quarter ended March, up 2.4% from the same period last year.
Rio, which took the crown as the world's biggest iron ore producer from Vale in 2019, shipped 72.9 million tonnes of iron ore during the quarter, up 5.5% from a year earlier. It missed the UBS estimate of 74.4 million tonnes.
Shares were up by 3.8% at A$91.92 at 0216 GMT, while the wider market .AXJO was up 1.9%.
Much like miners around the world, Rio too has been hit by the virus crisis. In March, it halted operations at its mines in South Africa, and slowed activity at its Canada and Mongolia units following government measures to contain the outbreak. in China continues to recover," CEO Jean-Sébastien Jacques said in a statement, as businesses there gradually come back online after months of lockdown due to the virus. "In the rest of the world, the outlook is more uncertain."
"Commodity supply is being disrupted as COVID-19 restrictions impact supply chains and people movement globally."
The novel coronavirus, which originated in China late last year, has now infected more than 2 million people globally and killed over 143,000, a Reuters tally shows.
VIRUS HITS ESCONDIDA
In copper, Rio sliced output forecasts due to virus-related disruptions at its Escondida joint venture in Chile, the world's largest copper mine, and repair work at its Kennecott operations in the United States after damages from an earthquake.
Rio cut its 2020 forecast for mined copper production by 10.4% to between 475,000 tonnes and 520,000 tonnes, from an earlier estimate of 530,000-570,000 tonnes.
It slashed its refined copper output forecast by 19.5% to 165,000-205,000 tonnes, from 205,000-235,000 tonnes.
It also lowered its 2020 spending estimate to $5 billion to $6 billion from an earlier guidance of $7 billion, partly due to the COVID-19 crisis and in part due to favourable currency impact from a stronger U.S. dollar, it said.
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