PERTH (CU)_2021 was not the best year for Rio Tinto, which delivered its weakest annual output since 2015, following a pandemic-induced skills shortage in Western Australia, an increased focus on preservation of Aboriginal cultural heritage and delays in delivering new mines designed to reinvigorate the firm’s aging division in the Trans-Tasman nation.
Therefore, Rio is hoping for a better year in 2022, with aims to boost its Australian iron ore exports by as much as 4 per cent in the New Year, although this is subject to the condition that the pandemic does not worsen and that the government is able to avoid lockdowns and other travel restrictions. The firm has vowed to export between 320 million and 335 million tonnes of the rocks and minerals from Western Australia, signalling hopes for a growth in volume instead of a decline. However, this range is less bullish than the target offered last year for 2021, between 325 million and 340 million tonnes. This suggests a cautious approach taken by Rio as it loses confidence in its WA iron ore division, and it continues to operate under a complex health situation.
“Our guidance assumes development of the pandemic does not lead to government imposed restrictions and widespread protracted cases related to new highly contagious variants with high severity,” the mining giant said in a statement to the stock exchange. “This risk is exacerbated globally by tight labour markets and supply chain delays.”
Government restrictions amid the pandemic has had a mixed impact for Australia’s resources industry, since WA’s hard borders have ensured the virtual absence of the virus in the state, which has led to a low absentee rates among miners. However, WA’s hard borders have made it difficult for mining firms to sourcing labour from the eastern states, leading to a skills shortage at their mines. The travel restrictions were also the reason for the delay in the completion of the $US4 billion ($5.5 billion) of new iron ore mines that are being built by Rio in WA, since the regulations have prevented the company from conducting “pre-delivery quality assurance” on steel and equipment that are required.