Miners set to ride iron ore boom - get ready to report their financial results at the end of the month.
Miners set to ride iron ore boom February 14, 2013 09:40 AM
Australia’s economic growth is expected to ease according to the central bank, with GDP growth to remain below trend this year. The Chinese economy has seen exports and imports jump last month. Analysts back iron ore prices as global miners BHP Billiton Limited (ASX:BHP), Rio Tinto Limited (ASX:RIO) and Fortescue Metals Group Limited (ASX:FMG) get ready to report their financial results at the end of the month.
China posts positive trade figures
China’s trade surplus has beaten expectations, despite narrowing to $US29.2 billion in January, according to China’s General Administration of Customs. The world's second-biggest economy reported a 25 per cent jump in exports and a 28.8 per cent jump in imports last month, compared to the year before.
RBA: weak outlook for GDP growth
The Reserve Bank of Australia’s (RBA) Statement on Monetary Policy has revealed Australia’s economic growth rate is forecast to ease this year on the back of anticipated peak in mining investment later this year. The RBA says the outlook for the Australian economy is slightly weaker than it appeared last year and GDP growth is now expected to be below trend this year before picking up next year.
Analysts are expecting BHP Billiton Limited (ASX:BHP), Rio Tinto Limited (ASX:RIO), Fortescue Metals Group Limited (ASX:FMG) to deliver strong earnings results provided the iron ore price continues to strengthen. CBA analysts expect Fortescue earnings to rise by 30 per cent with Rio and BHP estimated to book a 12 and 7 per cent increase respectively. Resource Analyst, David Lennox provides his outlook on how the iron ore price will travel throughout 2013.
"If you have a look at the investment scope for iron ore through 2013, it looks very robust in terms of pricing. In fact, we set a price now back some months ago for 2013 of between $130 and $140 a tonne and already iron ore is trading today at $145 a tonne, so the market I think has taken our premise and really started to drive it forward through 2013.”
Click here for full interview.
Regulation and approvals
Rio Tinto Limited (ASX:RIO) has welcomed a decision which will ensure its Hamersley and Robe rail lines in Western Australia should not be opened up to other users such as iron ore miner Fortescue Metals Group Limited (ASX:FMG).
Whitehaven Coal Limited’s (ASX:WHC) Maules Creek and Boggabri mine proposals in New South Wales have received conditional approval from the Federal Government.
Newcrest Mining Limited (ASX:NCM) has posted a 51 per cent fall in its first half net profit on the back of lower output and sales, but forecast improved margins and profitability. Australia’s biggest gold miner believes it is set for significant production growth over the next five years as two of its major growth projects near completion.
OZ Minerals Limited (ASX:OZL) full year net profit has slumped 44.6 per cent to $152 million. The result has been attributed to reduced copper prices, lower copper and gold sales and a draw-down of ore and concentrate stockpiles.
Deals and takeovers
Sundance Resources Limited’s (ASX:SDL) suitor Hanlong Mining has been ordered by Chinese officials to find a partner to help develop the flagship Mbalam project in West Africa before it will grant takeover approval.
Alacer Gold Corporation (ASX:AQG, TSX:ASR) has inked a $US171 million deal to sell its 49 per cent stake in the Frog's Leg gold mine in Western Australia. The news follows the completion of a strategic review and will result in Alacer shareholders receiving a special dividend of about $70 million.