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Thu, Feb. 11, 7:58 AM
- Rio Tinto (NYSE:RIO) -3.6% premarket after scrapping its dividend policy and slumping to a net loss for 2015 as well as its worst underlying earnings in 11 years.
- Rio says this year’s annual dividend could be roughly half the US$2.15/share payout declared for 2015, and that it can no longer justify its commitment to maintaining or steadily increasing its dividend each year as the global economic outlook worsens and prices for many commodities that it produces such as iron ore and coal are at multiyear lows.
- Rio’s move signals plenty of pain to come for global miners as they report earnings in the coming weeks; rival BHP is due to announce results on Feb. 23, and now is expected to follow Rio by abandoning its own progressive dividend policy.
- CEO Sam Walsh says Rio aims to cut another $2B off operating costs over the next two years, after chopping $1.3B in 2015, and plans to cut capex by $3B more than previously flagged over the next two years, but Walsh says the cuts would not be at the expense of investments in a new iron ore mine in the Pilbara, an expansion of the Oyu Tolgoi copper mine and a new bauxite mine in Australia.
- Rio reports a FY 2015 net loss of $866M vs. a $6.53B profit in 2014, weighed by $1.8B in writedowns relating mainly to its Simandou iron ore project in Guinea and exchange losses on debt; 2015 underlying earnings fell 51% to $4.54B from $9.31B in 2014, hit by weaker iron ore, copper and aluminum prices.
- Earlier: European earnings roundup
Tue, Feb. 9, 9:19 AM
Tue, Feb. 2, 9:17 AM| Tue, Feb. 2, 9:17 AM | 5 Comments
Mon, Jan. 25, 11:57 AM
- Brazilian iron ore miner Samarco, the 50-50 joint venture between Vale (VALE -1.7%) and BHP Billiton (BHP -2.7%), received serious danger warnings from ground sensors in 2014 and 2015, months before November's disastrous dam burst, according to Globo TV's Fantastico news magazine.
- The alerts from probes driven deep into the dam's structure to detect ground moisture and stability reached as high as "emergency" levels, according to the report, which cited Samarco-commissioned engineering studies provided to prosecutors investigating the case.
- The studies did not include sensor data from areas critical to the integrity of recent enlargements to the dam, an indication that the sensor data was lightly regarded, according to a prosecutor interviewed in the TV report.
Wed, Jan. 20, 2:57 PM
- BHP Billiton (BHP -4.4%) sinks to its lowest level in more than a decade as expectations rise that it will cut its dividend amid the commodity price crash and the Brazil dam disaster.
- In a production update after yesterday's close, BHP hinted at the potential for a change to its longstanding policy of maintaining or increasing its dividend while signaling its determination to protect its balance sheet and maintain the financial flexibility to take advantage of any recovery in copper and oil prices, Financial Times says.
- "Given our revised commodity price deck and prevailing financial risks, including the fallout from Samarco and ongoing oil price weakness, we have taken the view that BHP Billiton will need to reduce its progressive dividend policy on a permanent basis," according to Investec analysts.
Wed, Jan. 20, 9:13 AM
Fri, Jan. 15, 12:19 PM
- Amid BHP Billiton's (BHP -7.9%) $4.9B writedown on the value of its U.S. shale assets, analysts say the company's next safeguard against the commodities collapse may be to abandon its decade-old pledge to maintain or raise its dividend.
- "The biggest concern they have is can they fund their dividend, can they fund their capex plans?” says Citigroup analyst Clarke Wilkins, who believes BHP will cut both its dividend and project spending when it announces half-year results next month.
- Although the impairments have no cash impact, the idea that BHP can maintain its hefty dividend and protect its balance sheet looks increasingly untenable, writes WSJ's Helen Thomas.
- However, at least two analysts have come out with positive views on BHP, as Credit Suisse and Citigroup maintain Buy ratings and say the impairments were not unexpected.
Fri, Jan. 15, 10:34 AM
- Shares in global mining companies face their biggest back-to-back weekly losses in four years after signs of slowing growth in China, plunging oil prices and asset writedowns at BHP Billiton spark a selloff.
- Copper prices hit a six-year low for the fifth time in a week in London, -1.9%, amid worries about China’s economy, and are now down nearly 9% YTD; aluminum, lead, nickel and zinc all fell more than 1%.
- Long-dated “copper prices adjusted for producer country FX are mostly unchanged, which underscores the macro nature of the recent declines,” according to Goldman Sachs.
- "No lasting price recovery appears possible at present, neither on the metal markets nor on the commodities markets in general," Commerzbank says.
- BHP -7.7%, RIO -6.4%, OTCPK:AAUKF -5.7%, VALE -5.5%, FCX -5.4%, OTCPK:GLCNF -4.4%, TCK -4.3%, SCCO -1.1%.
- ETFs: JJC, DBB, JJN, JJU, CPER, JJT, BOM, RJZ, BOS, FOIL, JJM, LD, BDD, NINI, CUPM, LEDD
Thu, Jan. 14, 1:12 PM
- Brazil's Federal Police accuse seven people and three companies, including miner Vale (VALE +8.7%) and its Samarco joint venture with BHP Billiton (BHP +6.5%), of environmental crimes in response to November's major dam collapse.
- The move, which has no exact equivalent in the U.S. legal system, will trigger the start of a deeper investigation by police and typically represents a step toward formal charges, which in Brazil can be filed only by prosecutors.
- Vale says it received news of the accusations "with surprise," and has insisted that Samarco was solely responsible for the collapse of the tailings dam; unlike BHP, Vale had been depositing tailings from one of its own iron ore mines into the Funda reservoir that burst, leading prosecutors to deem it liable as a "direct polluter."
Tue, Jan. 12, 12:46 PM
- BHP Billiton (BHP -4.3%) could cut is payout in half when it releases results, and Rio Tinto (RIO -4.5%) also could cut its dividend later this year, HSBC analysts say, citing the need for the miners to cut expenses to help indebted balance sheets and offset weak commodities prices.
- HSBC also says Anglo American (OTCPK:AAUKF, OTCPK:AAUKY) and First Quantum Minerals (OTCPK:FQVLF) are most at risk if commodities remain weak, although continued South African rand weakness would help Anglo, while strength in copper and other stock-specific reasons could favor returns for Freeport McMoRan (FCX -13.4%) and Glencore (OTCPK:GLCNF, OTCPK:GLNCY).
- The firm downgrades BHP and First Quantum to Reduce, maintains a Reduce rating on Anglo, and has a Buy rating on FCX and Glencore.
Thu, Jan. 7, 9:15 AM
- Gainers: INVT +35%. DVAX +27%. QURE +14%. HMY +9%.
- Losers: TLOG -75%. EPZM -20%. GALE -19%. FINL -17%. SUNE -14%. AKBA -11%. RLYP -8%. FRO -8%. OTIC -8%. CIG -7%. SYN -7%. ATNM -7%. JKS -7%. KBH -7%. SAGE -7%. CEMP -7%. DNR -6%. ATML -6%. WLL -6%. SDRL -6%. ADMS -6%. BHP -6%. BBL -5%. AEZS -5%. VALE -5%. GGB -5%.
Wed, Jan. 6, 9:18 AM
Dec. 23, 2015, 9:19 AM
- Mining stocks look to be headed for a strong day, following a rebound in metal prices after China earlier this week raised hopes that demand may strengthen next year when it unveiled plans for more flexible fiscal and monetary policies.
- Prices for industrial commodities including copper, zinc, lead and aluminum are up at least 1%.
- Anglo American (OTCPK:AAUKF, OTCPK:AAUKY) +8.1%, Glencore (OTCPK:GLCNF, OTCPK:GLNCY) +6.7% in London.
- MT +10.2%, RIO +5.4%, VALE +4.8%, BHP +4.5% in U.S. premarket.
Dec. 8, 2015, 9:15 AM
Dec. 8, 2015, 9:15 AM
- BHP Billiton (NYSE:BHP) -5.8% premarket, Rio Tinto (NYSE:RIO) -6.6% and Vale (NYSE:VALE) -7.7% as iron ore prices continue to drop - now at 10-year lows - and China’s exports fell for a fifth consecutive month while imports slumped for a record 13th straight month.
- Iron ore with 62% content delivered to Qingdao, China lost 1.1% to end Monday's trade at $38.65/ton; according to estimates from Capital Economics, iron ore prices in the $30-$39 range would threaten the profitability for the major iron ore suppliers.
- China's exports fell 6.8% Y/Y in dollar terms in November vs. a 6.9% decline in October and expectations of a 5.3% drop; November imports fell 8.7% Y/Y vs. an 18.8% decrease in October and expectations of an 11.8% drop.
- Also premarket: X -4%, MT -7.4%, CLF -4.4% premarket.
Dec. 7, 2015, 9:58 AM
- Anglo American (OTCPK:AAUKF, OTCPK:AAUKY) sinks to new all-time lows, falling to as low as £3.70 ($5.59) in London trading, the lowest since the company went public in 1999.
- Anglo is among the most diversified miners, with EBIT spread among iron ore and manganese (27%), coal (14%), copper (9%), diamonds (31%) and platinum (14%) in H1 2015, but the miner is being penalized for its diversity, as nearly all commodities have amid softening demand by China.
- "What you tend to find in most crises is that correlations [between commodities] move one way and everything craps out together," says Bernstein analyst Paul Gait, a former Anglo executive who still advises buying the company’s stock because of its large reserves of commodities such as copper.
- Mining giants BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RIO) are far more exposed to a single commodity - iron ore - and have performed far better than their more diversified competitors; the companies have been able to weather the sharp drop in iron ore prices because their mines run at far lower costs than competitors, including Anglo.
- Earlier: Dow Jones: Anglo American to slash dividend, timing uncertain (Dec. 3)
BHP Billiton Ltd is a natural resources company. The Company is engaged in the producing commodities, including iron ore, metallurgical and energy coal, conventional and unconventional oil and gas, copper, aluminium, manganese, uranium, nickel and silver.
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