Diversified mining major Rio Tinto announced in April that it would cut its capital expenditure (capex) by some $2-billion in the wake of the Covid-19 pandemic, while also lowering its copper production guidance for the full year.

The miner told shareholders that capex for the full year would be between $5-billion and $6-billion, down from the previous guidance of $7-billion, partly owing to Covid-19 constraints and the favourable currency impact of the strong US dollar.

The miner said that the capex originally planned for 2020 could subsequently flow into 2021 and 2022.

Rio reported that all major projects being undertaken by the company progressed well in the quarter ended March, but were now being affected by the Covid-19 restrictions.

“The team is investigating ways to mitigate Covid-19 impacts, including those associated with roster changes, travel restrictions and the design and fabrication of long-lead items in China and Europe. While it is too early to estimate, the restrictions are likely to have some impact on our progress,” the company said.

“In these uncertain and unprecedented times, we continue to deliver products to our customers . . . our first priority [being] to protect the health and safety of all our employees and communities,” said CEO Jean-Sebastian Jacques.

“We are focused on maintaining a ‘business as usual’ approach and have taken extensive measures to ensure we can do so safely.

“All of our assets continue to operate and we achieved a very robust production performance in the first quarter. Our world-class portfolio and strong balance sheet serve us well in all market conditions and are particularly valuable in the current volatile environment.

“Our resilienceand value-over-volume strategy mean we can continue to invest in our business, and support our communities and host governments.”

During the three months to March, Rio reported a 5% increase in iron-ore shipments from the Pilbara, compared with the previous corresponding period, at 72.9-million tonnes, with iron-ore production up by 2% in the same period to 77.8-million tonnes.

Bauxite production in the March quarter reached 13.8-million tonnes, an 8% increase on the previous corresponding period, while aluminium production was down 2% to 783 000 t.

Meanwhile, copper production for the three months to March declined by 8% to 133 000 t, reflecting the expected lower grades at both the Kennecott and Oyu Tolgoi operations, which were partially offset by higher throughput volumes.

At the Kennecott operation, Rio noted that the company was working to resume normal operations following a 5.7-magnitude earthquake in March, with the mine, the concentrator, the tailings storage facility and the refinery all having resumed operations.

However, some damage has been reported at the furnace, which will impact on the full-year production guidance at the operation.

Rio recently downgraded its mined copper production guidance from the original guidance of between 530 000 t and 570 000 t to between 475 000 t and 520 000 t, while refined copper production has been downgraded from between 205 000 t and 235 000 t to between 165 000 t and 205 000 t.

In addition to the repairs anticipated at Kennecott, Rio said, measures taken at its Escondida mine to halt the spread of the Covid-19 pandemic would also impact on production.

The company has maintained its production outlook for its remaining commodities.