Rio Tinto: Solid Sales and Cash Costs for Pilbara Iron Ore Operations the Main Earnings Driver

No-moat Rio Tinto’s 2024 second-quarter shipments of 66 million metric tons from Pilbara iron ore operations were similar to last year and broadly aligned with our expectations. While 2024 first-half shipments of 132 million metric tons (Rio’s share) are 3% lower than 2023, Rio maintains iron ore guidance, with sales likely to be higher in the second half of 2024, driven by seasonal factors. We still forecast 2024 Pilbara iron ore sales of 280 million metric tons (Rio’s share), similar to last year. We also reiterate our forecast for 2024 Pilbara cash costs of USD 23 per metric ton, about 6% higher than last year, driven by inflation. Rio’s average realized price of USD 106 per metric ton for the half is modestly higher than our forecast of about USD 102 for 2024.