Rio Tinto reported Q2 iron ore shipments slightly of 86.7Mt, slightly below UBS forecasts. However, mined copper exceeded forecasts due to record throughput at Escondida. Aluminum and Alumina production were 1.2% below the broker forecast.
The company estimates that covid-19 could disrupt circa 3%-4% of annual copper supply in 2020.
The company is progressing its plans at Simandou with partners Chinalco and the Guinean government and at this stage it’s unclear whether Rio will remain involved in the project through to production.
Neutral rating maintained. The target price is increased to $102 from $101.
Target price is $102.00.Current Price is $104.14. Difference: ($2.14) – (brackets indicate current price is over target). If RIO meets the UBS target it will return approximately -2% (excluding dividends, fees and charges – negative figures indicate an expected loss).