|Bid||61.03 x 800|
|Ask||61.04 x 1400|
|Day's Range||60.57 - 61.28|
|52 Week Range||44.62 - 63.27|
|Beta (3Y Monthly)||0.44|
|PE Ratio (TTM)||7.76|
|Forward Dividend & Yield||3.61 (5.99%)|
|1y Target Est||62.82|
Australia’s ASX200 recovered today after a loss on Friday. After losing 0.55% on Friday, the index rose 0.22% today. Out of 200 stocks in the index, 83 advanced, while 103 retreated. 14 stayed unchanged today. BHP Group (BHP) and Rio Tinto (RIO) were among the gainers, while News Corp (NWSA) lost 1.29% on the Australian Stock Exchange today.
Rio Tinto has poached the top European mining analyst at Morgan Stanley as its new head of investor relations. Menno Sanderse will replace John Smelt, who is leaving the Anglo-Australian miner in September, according to people with knowledge of the situation. Rio and Morgan Stanley declined to comment.
(Bloomberg) -- In the world of metals and mining, sometimes it’s better to sell the raw product rather than the finished one.This seems to be a lesson for investors who chose to hold shares in ArcelorMittal rather than Rio Tinto Group this year. Despite nagging trade tensions and fears about global growth, Rio is up 30% in 2019, while the world’s biggest steelmaker has dropped 16%.Global diversified miners have rewarded investors with record payouts and benefited from soaring iron-ore prices due to the supply concerns that followed Vale SA’s dam disaster in January. At the same time, Chinese mills have continued to set new production records, consuming more of the steelmaking ingredient.Rio Tinto was carried by a “perfect storm,” said Arnaud du Plessis, a senior portfolio manager at CPR Asset Management in Paris, citing iron ore’s gains of about 75% in a year, the star performer among commodities. “Rio, which is highly exposed to iron ore and which benefits from very low production costs, has been the clear winner.” The London-based miner draws investors because of its strong balance sheet and high free cash flow generation, he said.The gains might not be over. Jefferies analysts including Christopher LaFemina said in a June 12 note that Chinese iron-ore inventories continue to dwindle and should reach critically low levels in the second half of the year. Further economic stimulus from the Asian giant is also likely to support demand, with Rio Tinto among the main beneficiaries, they said.Iron ore scaled new highs this week after Rio Tinto cut its production guidance, piling more pressure on supplies despite Vale’s authorization to restart a shuttered site.Weak AutosThe forces that have made Rio Tinto a winner have partly been the cause of ArcelorMittal’s woes. The rising cost of its key raw material have pressured the steelmaker’s margins, while higher production in China and U.S. tariffs on imports have pushed European manufacturers into overcapacity, further weighing on prices.Du Plessis noted that U.S. steel prices have fallen by more than 40% over the past year. “As a highly leveraged company, ArcelorMittal has not been in a good position at all,” he said. “As it’s highly exposed to the automotive market, the weak environment for that industry over the recent period has also affected ArcelorMittal.”ArcelorMittal has responded by cutting production, while the industry is lobbying the European Commission for further safeguard measures to stop cheaper Chinese steel from flooding the market. Goldman Sachs analyst Eugene King this month upgraded European steelmakers, saying margins are showing signs of inflection, while a decline in iron ore prices could provide further relief.A positive outcome in China-U.S. trade talks planned around the G-20 meeting in Japan at the end of June could be the ultimate catalyst steelmakers need to start outperforming again. Further dovishness from central banks could also support global growth, as well as a recovery in the carmaking industry, among the biggest consumers of steel materials.“Trade war resolution will be key for the rest of the year,” said Du Plessis. The fund manager prefers Rio Tinto over ArcelorMittal as long as the crisis remains unresolved. Under a positive outcome, ArcelorMittal could outperform initially, with Rio Tinto lagging behind it, especially after its recent outperformance, he said.ArcelorMittal’s current trading levels suggests it may be an attractive value proposition, offering 46% return potential over 12 months, according to the consensus of analysts tracked by Bloomberg. In contrast, the average analyst consensus sees Rio Tinto as fairly priced. The problem might be that at the moment, few investors are keen to bet on value.To contact the reporter on this story: Michael Msika in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Blaise Robinson at email@example.com, John Viljoen, Jon MenonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Autonomous trains might be fully running in remote Australia, but it will take awhile before those kinds of trains will be rolling down the North American countryside. Mining company Rio Tinto last week celebrated the completion of a multi-year project to deploy autonomous trains to serve its iron ore mines in western Australia. Rio Tinto touts its AutoHaul trains as belonging to the world's first automated heavy-haul long distance network.
It's not quite yet a flood but Australian resource companies are increasingly embracing renewable energies into their mining and natural gas operations even in the face of a federal government that veers toward climate scepticism. Among recent developments are moves by Rio Tinto to convert its iron ore trains to hybrid power, the commissioning of a solar power plant at an oil and gas facility operated by Santos in South Australia state, and battery storage being integrated into ConocoPhillips' liquefied natural gas (LNG) plant in Darwin.
(Bloomberg) -- Rio Tinto Group is looking at new ways to develop the giant Simandou iron ore deposit in Guinea that it almost sold last year, according to people familiar with the matter.Simandou is one of the world’s biggest untapped mineral deposits, but has a controversial past. For more than a decade, it has been the center of a bitter dispute that includes Vale SA and Israeli mining tycoon Beny Steinmetz. An agreement to sell the project collapsed last year, and Rio now appears increasingly committed to finding a way to build it.The second-largest miner has rehired consultants to work with its own team to study how the mine can be developed, said the people, who asked not to be identified because the matter is private. The work also focuses on how to export material out of the country, they said. The company all but shelved the project three years ago, so much of the work is based around updating its old plans.A spokesman for Rio declined to comment.Simandou has caused much trouble for Rio -- the company is subject to criminal probes, two executives were dismissed over payments and it’s still refusing to pay bonuses to its former chief -- but the potential riches are too high to easily walk away from. The miner has been exploring the asset since the 1990s, attracted by a resource that’s now estimated at more than 2 billion tons.The deposit came to prominence in 2007 as Rio fought off a hostile takeover bid from larger rival BHP Group. At the time, Rio used the resource to argue that the company was undervalued. Yet within a year, Rio was stripped of half its rights to the deposit and they were handed to Steinmetz. They were then stripped from the Israeli billionaire in 2014.Part of the deposit’s allure is that it contains some of the highest quality ore, a product in high demand from steelmakers as it’s less polluting. Rio views this as a long-term structural change in the market and that ore from Simandou will be in demand for decades.Still, there are huge challenges to navigate. The biggest is that under Rio and Chinese partner Aluminum Corp. of China’s original agreement with Guinea, the company committed to building a $12 billion rail line across the country, more than doubling the mine development cost. The government has long insisted the track is essential for national development. Any updated plan to develop the mine must be agreed with Chinalco and the government.Guinea has since said some smaller projects can exit through neighboring Liberia, where ArcelorMittal operates a railway. The steelmaker has said that rivals can only use capacity it doesn’t need and it’s working on plans to expand its own production.Rio’s latest work on the project could also make it easier to sell should it decide against development. The trouble with exporting ore has made the asset less attractive to buy, as shown by the collapse last year of a planned sale of Rio’s stake to its Chinese partner.Guinea has some of the world’s richest iron ore deposits, but has never exported anything. Yet there’s renewed interest in the country. Earlier this year, Steinmetz and Guinea agreed to end their dispute in a deal that’s led mining dealmaker Mick Davis to try and develop a project there. Billionaire mining investor Robert Friedland is in talks with BHP about taking control of another asset that has sat dormant for years.To contact the reporter on this story: Thomas Biesheuvel in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Lynn Thomasson at email@example.com, Nicholas Larkin, Liezel HillFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
On June 19, Rio Tinto (RIO) announced that it's cutting its iron ore production guidance again for 2019. Rio Tinto's production cut could be good news for seaborne iron ore prices and iron ore miners.
(Bloomberg) -- Iron ore’s dramatic year continued Wednesday as investors were whipsawed by two big pieces of news with conflicting implications.First, Brazil’s Vale SA said it won court approval to revive operations at one of its biggest projects, a development that’s likely to help ease global supply concerns that had sent prices to a five-year high. But just a few minutes later, No. 2 miner Rio Tinto Group said it’s not going to be able to hit an already lowered output target this year after problems at its sprawling operations in Western Australia.The iron ore market has been on a roar since January after the fatal collapse of a dam in Brazil resulted in steep reductions in supply from Vale, the biggest shipper. Those supply concerns have been compounded by operational problems in Western Australia, where Rio and BHP Group mine.Today’s announcements come after iron ore prices renewed a surge in recent days, hitting the highest levels in five years. Prices have been driven higher as the effects of supply disruptions in Brazil ripple through to China, where port inventories have tumbled and steel mills are churning out record volumes.London-based Rio now expects to produce 320 million to 330 million tons this year. That’s less than an earlier goal of 333 million to 343 million tons. Vale’s restart could bring on an additional 5.4 million tons this year, according to BMO Capital Markets.Vale said today that Brazil’s Superior Court of Justice revoked the injunction stopping the iron ore miner from using its dam in Brucutu, clearing the way for the company to reopen the mine within 72 hours.That’s the third time the Rio de Janeiro-based miner signaled the return to normal operations at facilities that accounted for almost a third of the capacity that’s been shuttered since the fatal tailings dam disaster in January.“The net impact of Rio Tinto and Vale’s announcements is a further reduction in iron ore supply in an already tight market,” BMO analyst Edward Sterck said. “Price spikes in iron ore probably cannot be ruled out, but we still think that pricing is sufficient to stimulate swing supply.”Rio cut its guidance in April after a cyclone hit its operations in Australia, lowering an original target of 338 to 350 million tons. BHP Group, the No. 3 producer, also cut its target, adding to supply concerns.Rio shares fell as much as 5.4% in London trading. The stock is still near the highest level in more than a decade because of the rally in iron ore, the most important commodity for the company.To contact the reporter on this story: Thomas Biesheuvel in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Lynn Thomasson at email@example.com, Liezel Hill, Dylan GriffithsFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
On June 19, Australia’s ASX200 posted its second consecutive gain. The index rose 1.2% and closed at a fresh 11-year high of 6,648.10. The index is inching towards its lifetime high of 6,851.5.
Rio Tinto was among the worst performing blue-chip stocks in London on Wednesday after the Anglo-Australian group cut production guidance for iron ore, its key commodity and source of profits. Rio said it had been experiencing “operational” challenges at the Greater Brockman hub in Western Australia, triggering a review of its mine plans. “Given the change in volume guidance, unit costs will be updated in the second quarter operational review [due on July 16],” Rio said in a statement.
Following anticipation of supply crunch from the world's two largest iron ore exporters, Brazil and Australia, iron ore prices are trending above $100 per ton, at levels last seen in 2014.
Australia’s S&P/ASX 200 fell 0.35% on June 17. The index traded in a narrow range as investors remained cautious. Out of the index's 200 constituents, 62 stocks advanced, while 130 declined. Telecommunications, energy, and mining pulled the index down.
Tighter environmental controls are pushing Chinese mills to go for higher-quality imported ore as opposed to domestic ore. Seaborne iron ore exporters including Vale (VALE), BHP Billiton (BHP), and Rio Tinto (RIO) generate more than two-thirds of the total seaborne iron ore supply.
Rio Tinto has published the contracts and licensing agreements that govern its biggest projects, as the Anglo Australia group seeks to improve transparency and counter perceptions that miners profit at the expense of host nations. While some of the Anglo Australian company’s contracts are already publicly available — including the investment for the giant Oyu Tolgoi copper project in Mongolia — others are more difficult to find. To solve that problem, Rio, a founding member of the Extractive Industries Transparency Initiative, has created an online disclosure table with links to its development contracts, weighty legal documents that can be difficult for non-specialists to read.
Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story...
Why Iron Ore Prices Are Bucking the Downtrend in Metals Prices(Continued from Prior Part)China’s steel demandAs the supply tightness in the seaborne iron ore market continues, there’s another factor supporting prices: Chinese steel demand.
Why Iron Ore Prices Are Bucking the Downtrend in Metals PricesIron ore pricesAs we discussed in Why Iron Ore Prices Could Have more Upside after Breaching $100, iron ore supply tightness and continued strong demand from China have driven iron ore