Rio Tinto’s iron ore exports fell in 2021 amid labor shortages

It is hoped the labor shortage in Western Australia’s mining industry could be eased after February 5, when the state signaled it could allow quarantine-free travel from around the world. other parts of Australia. However, the highly infectious Omicron variant of COVID-19, which has caused crippling labor shortages and supply chain disruptions in many other industries, increases the risk of another significant threat to the availability of mining labor.

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Rio Tinto on Tuesday set a new target to boost exports this year to between 320 million and 335 million tonnes of iron ore from Western Australia, but warned its guidelines assumed the appearance of new cases of coronavirus. linked to “new highly contagious variants” was not. lead to further restrictions imposed by the government.

The price of iron ore has surged in 2021 to a record high of US$230 per tonne, supported by an aggressive infrastructure-driven construction blitz in China, which has fueled huge demand for steel at the same time. as prolonged supply disruptions dragged on iron ore mines in Brazil. The boom has generated huge profits and windfall dividends for shareholders of major Australian miners BHP, Rio Tinto and Fortescue, and helped bolster the country’s finances amid the depths of the COVID-19 crisis. In 2021, iron ore accounted for $153 billion in export revenue, an all-time high.

However, the price of iron ore fell sharply in the second half as Beijing stepped up production cuts at its steel mills to reduce emissions from one of its dirtiest industries and global supply began to shrink. to augment.

As Chinese steel production rose again in December to its highest level since August and helped bring iron ore back above $120 a ton, investment bank UBS said it remained “cautious” on the outlook for the raw material.

“We expect demand to be weak and supply to increase in 2022,” said UBS analyst Myles Allsop.

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