Rio Tinto again lowers 2020 refined copper guidance after delayed restart at Kennecott smelter in US
Rio Tinto has further cut its 2020 production guidance for refined copper, by about 16%, after delays to the restart of the smelter at its Kennecott mine in Utah in the United States, the company said this week.
The delay was caused by unexpected issues following a scheduled 45-day maintenance shutdown that was scheduled for May.
“We are working closely with our customers to limit any disruption and expect to have the smelter fully operational in [the next] two months,” Rio Tinto said on Tuesday August 18.
Rio Tinto’s 2020 production guidance for refined copper now stands at 135,000-175,000 tonnes.
The latest downward adjustment, follows a previous downgrade in April to 165,000-205,000 tonnes - from 205,000-235,000 tonnes previously - after a 5.7-magnitude earthquake in March damaged the flash converting furnace at Kennecott. which then required a full furnace rebuild.
Uncertainty in mining and metals sector caused by the Covid-19 pandemic, along with a weakening US dollar index, quantitative easing in larger economies and the expectation of substantial infrastructure spending in China and elsewhere, are combining to push up spot copper prices.
Data from China’s National Bureau of Statistics released on August 18 shows that the country’s refined copper production fell by 5.3% to 814,000 tonnes in July, down from 860,000 in June and, while unchanged from June 2019, the figure also represents the lowest monthly total since March 2020.
The LME copper price touched a more than two-year intraday high of $6,686 per tonne in morning trading on Wednesday August 19, while copper stocks in LME-registered warehouses fell for a fifth straight day on August 18, dropping 2,475 tonnes to a 13-year low of 107,525 tonnes.
The US dollar index was 92.35 as of 12:37 Shanghai time on August 19, down by 10.2% after reaching 102.84 on March 19.
Rio Tinto’s production guidance for mined copper remains at 475,000-520,000 tonnes, having been adjusted down from 530,000-570,000 tonnes in April.