Rio Tinto has warned it will need to ship more low-grade iron ore over the next few years as it grapples with bringing its next generation of Pilbara mines in Western Australia into production.

The mining giant revealed its quality issues on Monday during an investor tour of the iron ore operations that provide the lion’s share of its earnings. The update is also a blow to Rio’s decarbonisation ambitions, where it is generally accepted that higher-grade ore produces lower emissions in steel making.