|Bid||61.20 x 1800|
|Ask||61.21 x 1800|
|Day's Range||60.81 - 61.50|
|52 Week Range||44.62 - 64.02|
|Beta (3Y Monthly)||0.49|
|PE Ratio (TTM)||7.76|
|Forward Dividend & Yield||3.61 (5.96%)|
|1y Target Est||65.37|
(Bloomberg) -- Vale SA’s second-quarter production due next week may offer clues on whether the world’s largest iron ore producer could provide some relief to a market reeling from shortages that sent prices to a five-year high.Analysts, on average, expect the Rio de Janeiro-based miner to report that output of the steelmaking ingredient rebounded to 74.6 million metric tons, from 72.9 million in the three months ended March, according to five estimates compiled by Bloomberg. That’s still below the 96.8 million tons Vale produced in the second quarter last year.A dam collapse in January forced the company to halt operations with capacity equal to almost a quarter of this year’s original production target of 400 million tons. While Vale has managed to bring its 30-million ton Brucutu mine back to normal operations, that hasn’t halted the surge in prices. Rivals BHP Group and Rio Tinto Group also saw their output decline, deepening the supply shortfall."The focus should be around plans for restarting any additional capacity," Scott Schier, an analyst at Clarksons Platou Securities, said in an interview. "There’s been some chatter about a potential restart of some more operation in September-October."Iron ore prices have surged more than 60% this year in Singapore this year amid the supply disruptions in Brazil and Australia. Futures closed 3% higher at 916 yuan ($133.10) a ton on the Dalian Commodity Exchange Friday, the highest since December 2013.In May, Vale Chief Financial Officer Luciano Siani Pires said the company expects to bring back online another 30 million tons in shuttered capacity over the next six to 12 months, after Brucutu returns to normal operations. Reviving the remaining 30 million tons would take another two to three years. The miner has maintained its 2019 sales guidance for iron ore and the semi-processed material called pellets at 307 million to 332 million tons.HSBC Holdings Plc analysts expect a tighter iron ore market longer-term because of "significant supply disruptions," and better demand prospects through 2021. The bank raised its 2019 price forecast for iron ore to $95 a ton, from $82.80 in mid-July.Rio Tinto’s iron ore production fell 7% to 80 million tons in the second quarter from a year earlier, as a result of a cyclone and operational challenges at its mines. Annual output from BHP’s Australian mines slipped about 2% to 269.6 million tons, missing an average forecast of 272 million tons among five analysts surveyed by Bloomberg.Vale’s iron ore and pellets sales likely rebounded to 70.6 million tons in the second quarter, from 67.7 million three months earlier, according to the average of five analyst estimates. That’s still down from 86.5 million tons a year earlier."We expect supply will take at least two to three years to normalize given the magnitude of the tragedy at Vale," HSBC analysts including Jonathan Brandt said in a note July 14. "A combination of supply disruption from the major iron ore producers and better-than-expected steel production in China has led to a significant rally in iron ore prices."To contact the reporters on this story: Vinícius Andrade in São Paulo at firstname.lastname@example.org;Sabrina Valle in Rio de Janeiro at email@example.comTo contact the editors responsible for this story: Luzi Ann Javier at firstname.lastname@example.org, ;Brad Olesen at email@example.com, Joe RichterFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
ULAANBAATAR/LONDON, July 19 (Reuters) - Mongolia will vote in August to rip up parts of an investment agreement with Rio Tinto for the Oyu Tolgoi copper mine, which may force the miner to make concessions in a project beset by delays and political squabbles. The country owns 34% of the mine, Mongolia's biggest foreign investment project, but lawmakers claim delays and cost overruns have meant it has run up more debt from the project than income thus far. Ending the 2015 "Dubai agreement" that launched Oyu Tolgoi's underground expansion would likely reduce Rio's future profits in Mongolia's favour.
Nucor's (NUE) profitability in the steel mills unit fell sequentially in Q2 due to the impact of service center destocking on order rates.
Univar's (UNVR) agreement includes the addition of Novozymes' leading product brands to NexusBioAg's extensive portfolio of biological and crop fertility products.
(Bloomberg) -- BHP Group forecasts iron ore production will rise as much as 6% this fiscal year after output slumped to a first annual decline because of a train derailment and a cyclone that deluged Australian ports.Total production from Australia is estimated to jump to between 273 million and 286 million tons in fiscal 2020 after recording its first annual decline since China’s steel boom began at the start of the century. Annual output fell to 269.6 million tons in fiscal 2019, missing an average forecast of 272 million tons among five analysts surveyed by Bloomberg.Key InsightsBHP expects the impact of higher operational costs and other productivity setbacks to total $1 billion in annual results to be published next month, a figure which includes $835 million of losses from unplanned production outages in the first halfWeaker output in iron ore will be offset by this year’s surge in prices that’ve jumped on strong demand and supply outages in Brazil and Australia. The steel-making material advanced 71% in the first six months, and is trading close to a five-year high, Mysteel Global data shows. BHP’s rival Rio Tinto Group on Tuesday reported quarterly shipments fell 3% on a year earlierWork to improve car dumpers in the iron ore unit will impact output this quarter, while BHP will carry out a major maintenance program at the Port Hedland export hub through the year under plans to lift capacity to 290 million tons. China’s steel industry is defying a bearish outlook on the nation’s growth, posting record daily production rates in June. Crude steel output rose 10% from a year earlier and run-rates were equivalent to more than a billion tons a year, according to data published MondayBHP forecasts copper output to rise as much 8% this fiscal year, while the producer’s oil and gas unit is projected to see production fall as much as 9% on maintenance at Atlantis and natural field decline.The producer expects an increase in the total cost of its provision for the 2015 Samarco dam failure in Brazil and is currently reviewing assumptions. BHP sees a $260 million charge for its share of work to decommission Samarco’s upstream tailings dams, as the asset won’t generate cash flow to cover the work.Market ReactionBHP’s Sydney-traded shares have gained 27 percent in the past year, compared to a 30 percent advance by rival Rio Tinto Group. Production data was released Wednesday before trading opened in Sydney.Get moreFor more details on the production data, click here.Read the statement here.To contact the reporter on this story: David Stringer in Melbourne at firstname.lastname@example.orgTo contact the editors responsible for this story: Alexander Kwiatkowski at email@example.com, Keith GosmanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The copper and gold miner reported solid second-quarter 2019 production results, but announced mounting challenges at an important growth asset.
The new agreement continues to provide flexible and competitive labor contract for AK Steel (AKS) and its employees at Butler Works.
In Jerry Maguire, a film about a sports agent, the hero’s client demands to be shown “the money”. Mongolia will have trilled a similar theme to miner Rio Tinto, but without a positive response. Its Oyu Tolgoi copper-gold mine project, one of the world’s largest, is behind schedule and beyond budget.
Rio Tinto has warned of further delays and a cost blowout of up to $1.9bn at its giant underground copper project in Mongolia’s Gobi desert. As a result, first sustainable production is now expected between May 2022 and June 2023 — a delay of 16 to 30 months compared with original guidance — while the cost of the $5.3bn project will increase by $1.2bn-$1.9bn.
Rio said the delay stemmed from the project's challenging geology. Rio said first production could be achieved between May 2022 and June 2023, a delay of 16 to 30 months, while the capital cost of the project was estimated at $6.5 billion to $7.2 billion, up from an original estimate of $5.3 billion. The news of the blowout came as Rio reported a 3.5% drop in second-quarter iron ore shipments, as disruptions caused by tropical cyclone Veronica in late March squeezed output in the April-June period.
Iron ore and gold prices are flying high, but we don't think this will last. Iron ore is benefiting from unusually strong demand and supply disruptions while gold is rising with negative interest rates. The iron ore miners-- BHP BHP / BBL , Rio Tinto RIO , Vale VALE , and Fortescue--on average are at a 30% premium, while the rest of our coverage is only at a 4% premium.
(Bloomberg) -- Rio Tinto Group’s much-followed copper discovery in remote Western Australia could leapfrog a key U.S. project to be fast-tracked into production by the world’s No. 2 miner, according to a senior executive.Work is progressing to assess the size and quality of the Winu exploration project in the Paterson province in the state’s north, Copper and Diamonds Chief Executive Officer Arnaud Soirat said after visiting the discovery for the first time this month.Dependent on further exploration work, the discovery -- where Rio now has as many as 190 staff, about 12 drilling rigs and is constructing a gravel airstrip -- could move ahead of the Resolution project in Arizona in the producer’s pipeline.The company is already advancing an underground expansion of the Oyu Tolgoi copper mine in Mongolia that’s scheduled to boost production from the early 2020s and expects key studies on Resolution to be completed by 2021. Rio has been working on the Resolution project — a joint venture with BHP Group — since 2004, and disclosed the first key details about Winu in February.“If the deposit is right, and the metallurgy is right, then potentially” Winu could come before Resolution, Soirat told reporters Friday at the Argyle diamond mine, also in Western Australia. The site looks “not that difficult to mine from what we have seen so far, and so potentially it’s a mine that could come in between” Oyu Tolgoi’s expansion and the development of Resolution, he said.Demand GrowthCopper demand is seen growing about 2-3% a year, driven by urbanization, greater adoption of renewable energy generation and rising demand for electric vehicles. Rising global living standards as developing nations urbanize will require about an extra 428 million tons of copper by 2050, or about two-and-a-half times the current amount of the metal installed today, according to Glencore Plc.While the Winu find, about 350 kilometers (220 miles) southeast of Port Hedland, has excited investors and competitors -- prompting some to pour over satellite imagery to gauge the project’s potential -- more assessment is still needed, Soirat said. Additional drilling this year should allow Rio to understand “how rich the deposit is, and how big it is as well,” he told reporters.Exploration staff are also ready to begin studying potential other targets nearby, according to Soirat. There’s potential that the Winu discovery could be part of a much a larger system that may eventually host multiple different mines, Rio’s CEO Jean-Sebastien Jacques said in May.“This is also a very big mining license, so we will also be looking at other potential sites in the region,” Soirat said. “There are some signs where our exploration team are saying it would be worth going to having a look.”Soirat also said:In Mongolia, Rio is continuing to review the schedule and construction costs of Oyu Tolgoi’s underground development amid difficult ground conditions that have slowed the planned $5.3 billion projectCo. is “looking at potential options” for copper acquisitions, but doesn’t regard M&A as a “must” and hasn’t found options that represent value Co. is studying options to further extend the life of the Kennecott mine in Utah, and investigating potential options to carry out selective underground mining at the siteRio’s projects are “nicely timed to come online at a time when everyone expects the market to start becoming under-supplied,” he said To contact the reporter on this story: David Stringer in Melbourne at firstname.lastname@example.orgTo contact the editors responsible for this story: Alexander Kwiatkowski at email@example.com, Keith GosmanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
China will report its second-quarter gross domestic product level on Monday — and the economy’s year-on-year growth rate could easily slow to the weakest pace since Beijing began publishing quarterly readings in 1992. Analysts have pencilled in a drop to 6.2 per cent, on an annualised basis, for the three months to the end of June, down from 6.4 per cent in the first quarter. Economists at Société Générale said China’s growth momentum had likely been dragged down by its tariff-battered manufacturing sector.
China consumes more than 70% of seaborne-traded iron ore. As a result, iron ore investors should track China's demand and outlook. Today, China released its trade data for June. China's iron ore imports were 75.18 million tons in June—9.7% lower YoY (year-over-year) and 10.2% lower month-over-month. In June, China's imports fell to the lowest level […]
Olin (OLN) to employ the net proceeds from the offering for prepaying all outstanding term loans under its senior term loan credit facility.
One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will...
(Bloomberg Opinion) -- When you’re in the business of buying and selling, timing is everything.That’s the costly lesson facing BHP Group, which is looking at options to divest its thermal coal assets according to a report Thursday by Thomas Biesheuvel of Bloomberg News that cited people familiar with the matter.Arch-rival Rio Tinto Group raised $2.7 billion selling mines in the Hunter Valley north of Sydney to Yancoal Australia Ltd., in a process that started in 2016. BHP could get far less: Macquarie Group Ltd. estimates $1.6 billion. That’s despite the fact that BHP’s Mount Arthur and Cerrejon mines, in the Hunter Valley and Colombia, post roughly the same Ebitda as as the ones Rio Tinto sold. BHP has had good reasons to keep operating these mines. They’ve produced several years of good earnings, for one. Mount Arthur has probably been even more profitable than it looks on paper, thanks to its ability to utilize tax losses that will now be running low.Still, it will be galling to sell at a discount when the long-term price for the high-energy coal mined in the Hunter Valley is now about a third higher than the $63 a metric ton level at the time Rio Tinto’s deal was announced.What’s changed? More or less everything.Back in 2016, coal was still the lowest-cost way of delivering new generation in most major markets. The slumping price of wind and solar generation since then has changed the game. Thermal coal will fall to 11% of U.S. generation by 2030 from the mid-20s at present, S&P Global Ratings wrote in a report Wednesday; outside of Spain and Germany, most European coal-fired plants will be retired by 2025.North Asian markets supplied by Mount Arthur look like an exception, with Japan, South Korea and China making up about 80% of Australia’s thermal coal exports. The first two countries are rare cases where falling renewables costs have failed to undercut the black stuff.Even there, though, the picture is dimming: Japan’s coal-fired capacity will go into to decline starting 2023, and actual demand should fall faster since its most recent plants use fuel more efficiently, according to a report this week by the Institute for Energy Economics and Financial Analysis, a research group opposed to fossil fuels. South Korea now has taxes on coal amounting to $60 a ton and imports will fall by half by 2040, according to the International Energy Agency.The group of potential buyers looks thin, too. Anglo American Plc, which has a one-third stake in Cerrejon alongside BHP and Glencore Plc, doesn’t seem in the mood for bulking up. The Japanese trading houses that have historically been major investors in Australia’s mining industry, meanwhile, have been quietly divesting strategic coal stakes for several years. What does that leave? Glencore, despite a promise in February to cap coal output, shouldn't be ignored. In that announcement, the commodities trader noted it may still buy out some minority stakes, which seems to anticipate a deal on Cerrejon. Glencore could also, in theory, get rid of its South African operations and replace them with Mount Arthur, keeping total output within limits and swapping in a more profitable mine. That would depend on finding a buyer for those South African mines, though, and there’s enough turmoil in that country’s coal and energy sector as it is.China is another possible buyer for Mount Arthur. The pit is adjacent to Yancoal’s existing operations, suggesting possible synergies. Still, 2019 isn’t the best year to be doing this. Since February, the country has been holding up shipments of Australian coal for ill-defined reasons that have a whiff of geopolitics about them. Any Chinese business looking for government approval to buy an Australian coal mine will have to reckon with that.Beyond that, there’s even the possibility that smaller local miners will have a go. In the old days, the idea that a relative minnow like Whitehaven Coal Ltd. could absorb a pit the size of Mount Arthur would have seemed absurd, but at Macquarie’s estimate of a $600 million price tag it’s not impossible. Based on BHP’s latest results, a buyer could pay off that sum in 18 months or so and run the mine for cash, assuming rehabilitation costs weren’t too high. Still, how times have changed. Back when Rio Tinto was hawking its coal assets, the company could plausibly argue that it still saw a bright future for the stuff. Nowadays, BHP is warning that it could be “phased out, potentially sooner than expected,” even as it’s trying to tempt buyers. Those M&A bankers are going to have their work cut out to get a good price.To contact the author of this story: David Fickling at firstname.lastname@example.orgTo contact the editor responsible for this story: Matthew Brooker at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- The world’s biggest diamond mine—famed more for the fistful of coveted pink and red gems it yields each year than being a major producer of lower-quality stones—is being shuttered by Rio Tinto Group after almost four decades. Rivals from Russia to Canada hope that can help turn around the beleaguered industry.Rio’s Argyle mine in remote Western Australia has transformed the sector since 1983 when the operation began supplying gems for both ends of the market. RBC Capital Markets and Panmure Gordon are among brokers, banks and competitors forecasting the closure could kick-start prices that have waned since 2011, according to PolishedPrices.com, an industry data provider.Production at Argyle, about 2,600 kilometers (1,600 miles) northeast of the state capital Perth, is scheduled to end before the end of next year after finally exhausting its supply of economically viable stones, said Arnaud Soirat, Rio’s head of copper and diamonds. “There is going to be a fair bit of supply which is going to come out of the market,” Soirat said in an interview Friday at the mine site. “In late 2020 we’ll be stopping operations and will start the rehabilitation of the site.”Argyle is best known as the source of about 90% of the world’s prized pink diamonds—rose-to-magenta hued stones that command among the sector’s highest prices. Sotheby’s auctioned the 59.6 carat “Pink Star”, mined by Rio’s rival De Beers, for $71 million in April 2017, a record auction price for any gem. While they attract most attention, the pink stones account for less than 0.01% of Argyle’s total output. The mine also is the biggest diamond producer by volume and that’s what has put the operation at the center of global oversupply. More than three-quarters of Argyle’s output is composed of lower-value brown diamonds, and the mine’s overall output sells for an average of between $15-$25 a carat, Canaccord Genuity Group Inc. estimated in 2017. That’s far less than the $171 a carat average price realized last year by De Beers.A glut of cheap and small diamonds has eroded profits for nearly every miner and made it increasingly hard for the industry’s cutters, polishers and traders to make a profit. In December, some of Rio’s customers refused to buy cheaper stones, while De Beers has been forced to cut some prices and offer concessions to buyers.Yet, with consumer appetite for diamonds stable, and major mines including Argyle scheduled to shutter, “the rational offset between supply and demand should lead to price growth,” Stornoway Diamond Corp. Chief Executive Officer Pat Godin said in March. Declining output, led by Argyle’s closure, will help revive prices, Toronto-based producer Mountain Province Diamonds Inc. said in May. About 21 million carats a year of global diamond production—including about 14 million a year from Argyle—are scheduled to exit the market by 2023, a volume that’ll only partially be offset by the addition of new mines, according to Russia’s Alrosa PJSC, the world’s diamond biggest producer. The shortfall between annual demand and supply could be between 11 million and 35 million carats by 2023, the company said in a presentation last month.“In terms of the pink diamonds, the impact is going to be even more dramatic” from Argyle’s closure, Rio’s Soirat said in the interview. “You can imagine the laws of supply and demand will apply, and you can imagine the impact that will have on those very rare pink, red, blue and purple diamonds.”The producer estimates Argyle has only about 150 colored diamonds of sufficient quality left to extract and make available for its annual tender, a sale to invited buyers that showcases 50-to-60 of the year’s most valuable gems, he said. Prices of pink diamonds have already as much as quadrupled over the past 10 years, and buyers are “now just waking up to the potential impact that Argyle’s closure will have” in lifting values further, said Frauke Bolten-Boshammer, proprietor of Kimberley Fine Diamonds, a retailer based in the town of Kununurra, about 200 kilometers north of the mine. She has traded the gems since the 1990s.Overall, the diamond sector probably also needs a boost to downstream demand, according to Richard Hatch, a London-based analyst at Berenberg. Mine closures that tighten supply “will help, but is it the shot in the arm that the industry really needs? Probably not,” Hatch said.Buyers have been hit by a shortage of finance and stagnant end markets, while a weaker rupee has made gems more expensive for Indian manufacturers, who cut or polish about 90% of the world’s stones.The closure of Argyle will remove about 75% of Rio’s diamonds output, yet the impact on the producer’s earnings will be negligible. Diamonds bring in only about 2% of earnings, while iron ore—the company’s top commodity—accounts for almost 60%.Rio in 2016 shuttered the Bunder development project in India and in 2015 exited the Murowa mine in Zimbabwe. The producer’s only other producing diamond asset, Diavik in Canada, is scheduled to close in 2025, though exploration work is continuing to potentially extend that site’s life, Soirat told reporters Friday at Argyle.Still, the company aims to retain a presence in the sector. While it could consider acquisitions to add new output, Rio’s main focus is on exploration—an option that’ll take longer to deliver new output growth. Work is advancing on the Fort a la Corne project in Saskatchewan, a joint venture project that potentially could enter production within five to 10 years, Soirat said.Diamonds is “not a big business in Rio, however it is a very profitable business,” he told reporters, adding that the company has advantages in the sector that it can look to continue to exploit, including technical expertise and branding. “It’s not a commodity, it is luxury goods, and so the market dynamics are completely different.” To contact the authors of this story: David Stringer in Melbourne at firstname.lastname@example.orgThomas Biesheuvel in London at email@example.comTo contact the editor responsible for this story: Keith Gosman at firstname.lastname@example.org, Alexander KwiatkowskiFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- BHP Group is moving ahead with plans to exit thermal coal, according to people familiar with the matter, the latest move by the world’s biggest miners to retreat from the dirtiest fuel.BHP is looking at options to divest the business that includes assets in Australia and Colombia, said the people, who asked not to be identified as the development has not been made public. There’s no guarantee the company will go ahead with a sale, the people said.The decision demonstrates how growing climate-change pressure from investors and regulators is reshaping the future of extractive industries. Rival Rio Tinto Group has already removed all exposure to thermal coal and other producers including Anglo American Plc have been cutting output amid growing pressure from investors. Even Glencore Plc, the biggest shipper, has said it will look to limit production.BHP had already signaled cooling interest in thermal coal. Earlier this year, Chief Financial Officer Peter Beaven said the company had no appetite for growth in the commodity.While thermal coal makes up a fraction of BHP’s profits, it’s led to some investors saying they can’t hold the stock.Norway’s $1 trillion sovereign wealth fund last month got the green light to dump more than $13 billion in stocks linked to fossil fuels, including companies that mine more than 20 million tons of thermal coal, pushing Anglo American and BHP out of reach. Climate Action 100+, which has the backing of more than 300 investors managing $32 trillion, has already forced reforms from extractive giants such as BP Plc and Glencore.For BHP, thermal coal has become increasingly hard to justify. The company’s profits are driven by iron ore, oil, copper and coking coal (used to make steel) and thermal coal is likely to contribute just 1% of profit this year, according to Liberum Capital Markets.BHP’s move comes as its biggest rival, Rio, has become increasingly emboldened on climate change after offloading its last coal mines last year. The company has started promoting itself as the only major miner without exposure to fossil fuels.The move is also likely to put further pressure on Anglo, which, despite dramatically cutting its coal output, still mines almost 30 million tons a year.Still, exiting coal is unlikely to be easy for BHP. Its Colombian mine stake, which it owns with Anglo and Glencore, feeds the European market where demand is weak right now. Capacity could be cut in the country to balance an oversupplied market, Liberum estimated.Macquarie Group Ltd. and JPMorgan Chase & Co. are seen as frontrunners to run a sales process for the BHP assets, the people said.Macquarie said earlier this year that BHP’s Australian thermal coal business had a net present value of about $600 million and estimated the figure for its Cerrejon business in Colombia at about $1 billion.(Updates with charts and context.)\--With assistance from Dinesh Nair.To contact the reporter on this story: Thomas Biesheuvel in London at email@example.comTo contact the editors responsible for this story: Lynn Thomasson at firstname.lastname@example.org, Liezel HillFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The gold rally was primarily driven by three macro factors -- a dovish Fed and other major central banks, trade-related conflict across the world and fears of a global economic slowdown.