Rio Tinto and Antofagasta Shares Rise Amid Q2 Operational Updates

Strategic Insights -

Rio Tinto Ltd and Antofagasta PLC shares rose 2% after the two giant miners posted operational updates for the second quarter, with both companies hailing excellent performance from their mines. Rio's boss, Simon Thompson, highlighted record production from the bauxite business and from the massive copper-gold deposit Oyu Tolgoi in Mongolia, while Antofagasta's CEO, IvÈín Arriagada, noted increased production from its two largest mining districts and lower net cash costs.

Key Takeaways:

  • Rio Tinto's iron ore production rebounded from a weak start, reaching the highest Q2 production since 2018, with iron ore prices 10% higher than in London due to US tariff risks.
  • Antofagasta's production increased 3% compared to the first quarter and 11% compared to the prior year, with net cash costs falling 27% or 32% compared to the prior year, benefiting from gold and molybdenum by-products.
  • Copper prices rebounded in Q2 amid easing trade tensions and a weaker dollar, with US CME prices 10% higher than in London.
  • Analysts at Panmure Liberum noted that iron ore production was the highest Q2 production since 2018.
  • Analyst Peter Mallin-Jones at Peel Hunt said copper production for the quarter was a slight miss compared to expectations, but unit costs were lower than expected.
  • Antofagasta's supply-side is becoming increasingly constrained, with the company expecting an increase in production quarter-on-quarter for the remainder of the year.

Statistics:

  • Rio Tinto's iron ore production was the highest Q2 production since 2018.
  • Antofagasta's production increased 3% compared to the first quarter and 11% compared to the prior year, with net cash costs falling 27% or 32% compared to the prior year.
  • Copper prices rebounded in Q2, with US CME prices 10% higher than in London.
  • Analyst Peter Mallin-Jones at Peel Hunt expected copper output of 163kt, gold output of 59koz, and molybdenum output of 3.9kt, but received 160kt, 48koz, and 4.4kt, respectively.

Sources:

  • "Rio Tinto and Antofagasta Shares Rise Amid Q2 Operational Updates" (original text)
  • Panmure Liberum (analysts noted that iron ore production was the highest Q2 production since 2018)
  • Peel Hunt (analyst Peter Mallin-Jones' comments on copper production and unit costs)
  • Rio Tinto Ltd (operational update)
  • Antofagasta PLC (operational update)