Mining giant Rio Tinto has increased production of iron ore, aluminium and copper and says more investment in lithium will be required to fill a long-term supply gap.
Global supply chain challenges have improved, although risks remain on certain routes such as through the Panama and Suez Canals, Rio Tinto said in a production update released on Tuesday Australian time.
Signalling a possible end to a credit squeeze for other miners, particularly for stalled energy minerals projects, the company said monetary policy remains tight around the world but interest rates "may now have peaked."
Commodity prices found "some support" during the last three months of 2023 but labour costs are still rising amid tight markets in Australia, Canada and the United States, the world's second-biggest miner warned.
Lithium carbonate prices have fallen more than 80 per cent since early 2023 but the outlook for lithium remains strong over the longer term, Rio said.
"EV penetration rates will continue to increase as countries decarbonise and more investment into mine supply will be required to fill the supply gap," the company said.
Energy transition-related copper demand supported Rio's growth in 2023 and helped offset weaker demand from the construction sector as the global economy stuttered.
Copper is at the heart of essential technologies for a transition to renewable energy from fossil fuels, including solar panels, wind turbines, transmission networks and electric cars.
The company's production guidance was unchanged, with expectations for Pilbara iron ore shipments of 323 to 338 million tonnes for 2024.
Pilbara shipments rose 10 million tonnes or three per cent to 331.8 million tonnes in 2023 - the second highest on record.
"There is good demand for the materials we produce, and our purpose and long-term strategy make more sense than ever," CEO Jakob Stausholm said.
At the Rincon lithium project in Argentina, work on a 3000 tonne per year lithium carbonate starter plant is underway and first production is expected by the end of 2024.
As the mining sector grapples with an ugly history, the company said it continues to work on its culture after reports of bullying, sexual harassment, racism, and other forms of discrimination.
All leaders and more than 80 per cent of employees have completed training on building psychological safety and a care hub has been launched to help people impacted by harmful behaviours
"We will be conducting an independent progress review with Elizabeth Broderick during 2024 which we plan to share externally," Rio said.
The mining heavyweight re-iterated a commitment to halve emissions by 2030 and achieve net zero by 2050 but has cut back on spending.
In December, the decarbonisation capital investment to 2030 was revised down to $US5-6 billion from $US7.5 billion.
