Rio Tinto plcNYSE
Thu, Dec. 8, 6:45 PM
- Rio Tinto (NYSE:RIO) CEO Jean-Sebastien Jacques said this week that he is on the hunt for new diamond mines, but with more than half the industry controlled by just two companies and new discoveries rare, finding them will not be easy, Bloomberg reports.
- Analysts say Rio could look for a trophy producer such as Anglo American's (OTCPK:AAUKF, OTCPK:AAUKY) De Beers unit, but Anglo sees diamonds as a core part of its future; Rio could pursue Anglo outright, but that would involve taking on many mines it would not want.
- Rio tried last year to by the 40% in Canada's Diavik mine from Dominion Diamond (NYSE:DDC) that it does not already own, but the deal was rejected internally before reaching the board level; it also could try to buy the company outright.
- Another option could be to buy Mountain Province Diamonds’ (NYSEMKT:MDM) 49% stake in Canada's Gahcho Kue mine; otherwise, a remaining handful of smaller producers such as Petra Diamonds (OTC:PDMDF), Lucara Diamond (OTCPK:LUCRF) and Gem Diamonds (OTC:GMDMF) likely would not make a material impact in Rio’s business.
- Even if Rio resorts to exploration, new deposits are so hard to find that most of the industry, which has spent $7B in exploration since 2000, has all but given up.
Wed, Dec. 7, 5:36 PM
Wed, Dec. 7, 11:26 AM
- Rio Tinto (RIO +4.3%) is upgraded to Outperform from Neutral at Credit Suisse, which forecasts an above consensus dividend hike in February 2017.
- The firm says it is switching its preference to Rio from BHP Billiton (BHP +1.3%) based on vanishing iron ore surpluses as steel production rises and supply growth declines, attractive valuation, and balance sheet strength enabling additional shareholder returns.
- While Credit Suisse believes spot iron ore prices at $80/ton are elevated and reflecting over-exuberant markets, it anticipates $65/ton for Q1 2017, an average of $55 for 2017 and $53 in 2018.
Wed, Dec. 7, 8:45 AM
- Rio Tinto (NYSE:RIO) CEO Jean-Sebastian Jacques says he expects a dispute with China over copper exports from Mongolia is a "bump in the road" that will be resolved shortly.
- Last week, Rio’s Turquoise Hill (NYSE:TRQ) subsidiary in Mongolia was forced to suspend copper shipments from the Oyu Tolgoi mine after Chinese authorities closed a border crossing and ordered copper to be shipped via a different, more treacherous route; China’s action was thought to stem from displeasure at a visit to Mongolia by the Dalai Lama.
- The mine is a flagship project for Rio, which earlier this year approved a $5.3B expansion to tap deeper levels of the deposit.
Mon, Dec. 5, 2:58 PM
- Citigroup upgrades its outlook for the metals and mining sector to bullish from bearish, predicting that most raw materials - but not coal and iron ore - will perform strongly next year as global economic growth picks up, the oversupply eases off and investors plow in more funds.
- "A stronger cyclical U.S. backdrop, coupled with improved supply and demand fundamentals could keep industrial commodity prices buoyant," Citi says. “For commodities in general, the oversupply that was induced by high prices in the first decade of this century are finally being balanced."
- The 2016 advance in iron ore and coal, however, “was a fluke, and largely a result of domestic politics in China confronting market forces that remain inherently bearish."
- Citi also raises its ratings on diversified mining giants BHP Billiton (BHP +1.9%) to Buy from Sell and Rio Tinto (RIO +1.1%) to Neutral from Sell.
Wed, Nov. 30, 11:18 AM
- Iron ore prices fell today by the most since March, extending a retreat from a two-year high, as China’s exchanges lowered the daily trading limit and raised margin requirements in a bid to clamp down on speculation.
- Ore with 62% content delivered to Qingdao fell 6.8% to $72.08/ton after hitting $80.83 on Monday, the highest since October 2014 and culminating a 65% YTD surge.
- Despite the steps to tighten trading rules, "the basics that are driving that speculation - the search for higher yielding assets and the desire to hold U.S. dollars at a time for a weaker yuan - have not changed,” says Westpac Banking economist Justin Smirk. “As such, we would expect to see significant volatility for some time.
- Relevant tickers: BHP, RIO, VALE, OTCQX:FSUMF.
Tue, Nov. 29, 8:33 AM
- Rio Tinto (NYSE:RIO) is asking Chinese steel mills to pay a premium for its highest grade iron ore product for the first time since 2010, Reuters reports.
- Rio is seeking up to $1/ton more than the index price for Pilbara's PB fines from Chinese mills on long-term contracts for 2017, in a break from a years-long trend of pricing at spot values, according to the report; Rio previously was selling the ore at a premium only to traders.
- Rio reportedly also has pushed up the premium it seeks from traders to $2-$2.50/ton over the index price for PB fines for January to April, which would be a record high and up from a premium of $1.50 for the four-month period through this December.
- "The steel market is so hot this year and they think it's something that buyers can accept," a source tells Reuters. "If Rio gets it, other miners may follow."
- Related tickers include BHP, VALE.
Mon, Nov. 28, 1:57 PM
- The SEC is investigating a $3B impairment charge Rio Tinto (RIO +0.2%) booked on a 2013 Mozambique coal deal, Bloomberg reports.
- The probe is ongoing and is separate to an internal Rio review into payments made to a consultant regarding an iron ore project in Guinea, according to the report.
- Rio acquired Riversdale Mining in 2011 for A$3.9B before writing the value of the assets down by $3B two years later; the charge, part of a wider $14B in asset writedowns, helped lead to the departure of then CEO Tom Albanese.
Wed, Nov. 23, 6:37 PM
- Rio Tinto (NYSE:RIO) outlines plans to generate $5B of additional free cash flow over the next five years from a productivity drive as part of its long-term strategy.
- Rio also forecasts lower capital spending than it had indicated earlier, coming in at less than $3.5B vs. previous guidance of ~$4B; capex guidance of $5B in 2017 and $5.5B in 2018 is unchanged from previous estimates.
- In addition to raising productivity across its $50B portfolio of assets by " focusing on operational excellence to generate superior shareholder returns through the cycle," Rio says it is committed to investing in growing the business in the near term via three key projects: Silvergrass in Western Australia, Amrun in Queensland and Oyu Tolgoi in Mongolia.
Wed, Nov. 23, 7:45 AM
- Rio Tinto (NYSE:RIO) agrees to sell its aluminum-related operations in Scotland to privately-owned SIMEC for $410M (£330M), part of its plan to trim some of its less profitable aluminum operations.
- The sale includes Rio's Alcan Aluminium UK unit, which includes an operating aluminum smelter at Fort William, hydroelectric facilities at Kinlochleven and Lochaber, and associated land.
- Rio Tinto has now agreed to more than $1.3B in divestments in the current year, bringing the total value of divestments announced or completed to $5.3B since January 2013.
Tue, Nov. 22, 3:45 PM
- U.S. Steel (X +11.4%), AK Steel (AKS +10.7%), Steel Dynamics (STLD +4.1%), Nucor (NUE +4.4%) and Commercial Metals (CMC +4.7%) all surge to 52-week highs, extending their Trump-fueled rally as trade protectionist talk suggests that higher than usual premiums can be achieved for steel mills.
- BofA Merrill Lynch raises its 2017 average price estimate for U.S. hot-rolled coil to $650/short ton vs. its prior view of $535, as rising global prices and more protectionism should fuel strong steel prices into 2017 (SLX +5.8%).
- Bloomberg reports BofA boosted its stock price targets for Buy-rated AKS to $12 from $7, STLD to $37 from $30, CMC to $24 from $20, NUE to $65 from $57, and Allegheny Tech (ATI +7.5%) to $20 from $19; the firm remains Neutral on X and Reliant Steel (RS +6.1%).
- Also sharply higher today: MT +8.3%, CLF +13.8%, WOR +5.3%, RIO +4.1%, BHP +5.2%, VALE +7.8%.
Mon, Nov. 21, 8:25 AM
- Rio Tinto (NYSE:RIO) says it is preparing to cut more jobs at its West Australian iron ore business, in the miner's third sizable cutback in the past two years.
- Rio is not specifying the number of jobs to be cut, although local media reported up to 500 management and support positions were on the line; Rio currently employs ~11K workers after cutting 700 people early this year and 800 early last year.
- Rio says "the market outlook remains challenging, and we currently have 1,000 initiatives underway across our business to reduce costs [and] improve productivity."
Wed, Nov. 16, 4:59 PM
- Rio Tinto (NYSE:RIO) terminates top energy and minerals executive Alan Davies and legal executive Debra Valentine following the company's probe into payments connected to its Simandou iron ore project in Guinea.
- Last week, Rio suspended Davies over $10.5M in payments made to a consultant in 2011 for assisting negotiations with Guinea’s President on the mine.
- Davies will be replaced by Bold Baatar, who will join the executive committee as Energy and Minerals chief executive.
Wed, Nov. 16, 10:56 AM
- Global copper markets will be oversupplied for at least two years, according to executives at some of the world's top copper producers, casting doubt on the chances of a prolonged rally in prices.
- The cautious outlook comes after benchmark copper prices last week recorded their biggest weekly gain since 2011, largely fueled by Pres.-elect Trump's promises of infrastructure spending.
- "In 2017, it will still be a relatively oversupplied market. In 2018 it will not be better than 2017," says a VP at Jiangxi Copper, China's largest copper producer; he also describes the market's recent moves as "irrational."
- The founder and president of Maike Metals Group, one of China's top metals traders, says China's government needs to control "overspeculation" in the local futures market, hit by volatile trading over the last week as it was whipsawed by speculative cash.
- Relevant tickers include FCX, BHP, RIO, VALE, OTCPK:GLCNF, OTCPK:GLNCY, OTC:ANFGF, OTCPK:AAUKF, OTCPK:AAUKY, JJC, CPER, CUPM.
Wed, Nov. 16, 7:48 AM
- BHP Billiton (NYSE:BHP) says it will run its iron ore mines at full speed through the year-end amid surging global prices rather than suspend some Australia operations like rival Rio Tinto (NYSE:RIO).
- Rio, Australia's biggest iron ore miner, yesterday announced a two-week shutdown during Christmas at its Hope Downs 4 mine in Western Australia, although it expects the mine to meet its 2016 production target.
- Fortescue Metals (OTCQX:FSUMF) also says it will keep its operations running through Christmas.
- BHP -2.5% premarket, RIO -1.8%.
Tue, Nov. 15, 9:17 AM