Rio Tinto axes iron ore export forecast for the year

Mining giant Rio Tinto (LON, ASX:RIO) has scaled back its annual targets for Australian iron ore shipments and steelmaking coking-coal production this year as bad weather and ongoing work to modernize its rail lines have hit operations.

Rio said it would export 330m tonnes of iron ore in 2017, rather than 330m-340m tonnes previously expected, citing bad weather and ongoing work to modernize its rail lines.

Iron ore exports from Australia's west coast are now expected to be about 330 million tonnes in 2017, the bottom of a previous target of up to 340 million for the year, Rio said Tuesday.

The miner also revised down its expected share of hard coking coal for the year to between 7.2 to 7.8 million tonnes from 7.8 to 8.4mt. The world’s second largest miner said production of the commodity fell 14% in the second quarter after Cyclone Debbie swept across eastern Australia in March, bringing heavy rains and flooding.

Analysts, however, predict strong prices for the steelmaking material will still deliver generous first-half profits and dividends next month. Some of them are even saying that Rio's 2017 dividend is on track to be the largest in the company's history thanks to the rebound in iron ore prices, Australian Financial Review reports.

The commodity surged to the highest level since mid-April Tuesday after adding $2.03 a tonne overnight, to trade at $68.84 a tonne, data from the Metal Bulletin shows. The iron ore division delivered 90% of Rio's underlying earnings last year.

In other commodities, the company maintained production guidance for most of them, including for copper, which was scaled back in April following a historically long 43-day miners' strike at its jointly-owned Escondida copper mine in Chile.

Overall output for copper, said Rio, fell 21% in the first half of the year, but the miner still expects to produce between 500,000 and 550,000 tonnes this year.