Turquoise Hill shares plunge on delays, higher costs at Mongolian mine

Pilbara iron ore exports slip 3 per cent as Rio Tinto tips $2.7b budget blow-out at Oyu Tolgoi copper mine in Mongolia

Pilbara iron ore exports slip 3 per cent as Rio Tinto tips $2.7b budget blow-out at Oyu Tolgoi copper mine in Mongolia

Rio approved the development of the underground operation in 2016 with first production estimated for 2020; the project's open pit began production in 2013. The higher price is expected to underline a bumper cash result for Rio when it releases its half year results next month, which in turn could mean hefty dividend payments to shareholders. This range includes contingency of up to eight months reflecting the unexpected and challenging geotechnical issues, complexities in the construction of shaft 2 and the detailed work still required to reach a more precise estimate.

Rio also reported a 3.5% fall in second-quarter iron ore shipments after disruptions caused by tropical cyclone Veronica in March hit production.

Rio Tinto last month cut its annual iron ore shipment guidance to between 320m and 330m tonnes.

In fact, in the quarterly report, Rio revealed the positive impact of the surge in global iron ore prices thanks to the impact of the January 25 mine dam disaster in Brazil and Cyclone Veronica and the fires. In fact, it looks like Rio will report revenue from its 100% iron ore business of $US10.57 billion against $US8.3 billion.

BHP in June revised its full-year production guidance to between 320-million and 330-million tonnes, down from the previous estimate of between 333-million and 343-million tonnes, while the cost guidance for the iron-ore division has also been increased to between A$14/t and A$15/t, up from the previous estimate of between A$13/t and A$14/t.

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That's a rise of 36% and means Rio will report a surge in revenue next month for the six months to June from iron ore operations.

The miner's average price received for iron ore in the first half of 2019 was $US78.5 ($A111.84) per wet metric tonne, compared to $US57.9 per wet metric tonne in the first half of 2018. Marshall Wace North America L.P. bought a new stake in shares of Rio Tinto during the first quarter valued at approximately $28,033,000.

The decision reflects "challenging operational performance" in the company's first half 2019, according to company chief executive Jean-Sébastien Jacques.

But they said the good iron ore production numbers were offset by the Oyu Tolgoi delays. "What's happening on the price side is key". Finally, Exane BNP Paribas lowered Rio Tinto from a "neutral" rating to an "underperform" rating in a research report on Wednesday, April 10th. "The alternative plans may require relocation of critical underground infrastructure and a change in mining sequence", added Edward Sterck, an analyst at BMO Capital Markets, said in a note to investors.

Rio's share price was down 0.64 percent on Tuesday, ending the day of trading at AU$103.25.

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