The company delivered on its 2019 guidance and has set forecasts for iron ore shipments in 2020 at 330-340mt.
UBS notes the decision to remove two of the three mid-access drivers at Oyu Tolgoi is a material re-design of the mine plan, which the company acknowledges will have an unfavourable impact on the schedule.
First sustainable production is forecast for May 2022 to June 2023. Capital expenditure of US$6.5-7.2bn is forecast which does not include the US$1.5bn needed for a power plant.
Neutral rating and $97.50 target maintained.
Target price is $97.50.Current Price is $105.24. Difference: ($7.74) – (brackets indicate current price is over target). If RIO meets the UBS target it will return approximately -8% (excluding dividends, fees and charges – negative figures indicate an expected loss).