RIO, FMG, NCM, MIN: Why are these ASX mining stocks in limelight?

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Highlights

  • Australia share market reached a ten-week high today (August 16) thanks to mining giant BHP, whose shareholders celebrated a record dividend.
  • The ASX 200 closed at 7,105.40 points, up 0.58% or 41.10 points today.

The ASX 200 Materials index closed 1.66% higher today (August 16)at 16,377.90 points and .

among 11 sectors, materials were the best performing sector today, followed by consumer staples and healthcare sectors.

The ASX 200 closed at 7,105.40 points, up 0.58% or 41.10 points today.

The market reached a ten-week high thanks to mining giant BHP, which announced record dividend and the second-largest full-year profit in the history of the company.

Rebounding consumer confidence and indications that the RBA may reduce the pace of rate increases also boosted the confidence of the investors. Last week, the weekly ANZ-Roy Morgan confidence index increased by 4.9% to 84.2 points.

According to the minutes from this month's meeting, the RBA intends to raise its benchmark rate in the coming months.

In this article, we at Kalkine Media® will discuss about the performance of some top ASX-listed metals and mining companies.

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Rio Tinto Limited

ASX-listed Rio Tinto Limited (ASX:RIO) produces copper, gold, iron ore, coal, aluminium, borates, titanium dioxide and other minerals and metals.

The  company informed yesterday (August 15) that its non-binding offer to purchase full ownership of Turquoise Hill for CA$34 in cash per Turquoise Hill share has ended.

Due to a worsening and more unpredictable external environment, Turquoise Hill's peers' average share price performance has decreased 35% since Rio Tinto made its proposal on 14 March 2022.

In addition, Turquoise Hill stated in its most recent earnings results that it must raise equity funds of more than US$1 billion to meet its anticipated funding needs. As it weighs its alternatives, the mining giant will continue to practice sound financial management.

Meanwhile, shares of Rio closed trading at AU$95.93 per share today, up 0.69% on ASX. In the last one month, the company's shares have grown 0.69% but declined by 3.77% on a YTD basis.

Fortescue Metals Group Ltd

Fortescue Metals (ASX:FMG) is a vertically integrated green energy and resources organisation. It is incorporating green energy solutions into the mining, processing, and transporting of iron ore for export from the company's deposits in the Pilbara region of Western Australia.

On 28 July 2022, Fortescue shared its June 2022 quarterly production report. In the statement, the company said it has recorded iron ore shipments of 49.5 million tonnes (mt) for the quarter and 189.0mt for FY22, exceeding full-year guidance.

For the quarter, average revenue was US$108/dry metric tonne (dmt), realising 78% of the average Platts 62% CFR Index, while average revenue for FY22 was US$100/dmt.

Fortescue further informed that strong cash flow resulted in US$5.2 billion in cash on hand and US$0.9 billion in net debt at the end of June 2022, down from US$2.4 billion at the end of March 2022. A total of US$3.1 billion was spent on capital projects in FY22, including the Pilbara Energy Connect (PEC) and Iron Bridge Magnetite projects.

Meanwhile, the company's shares ended 1.57% higher today at AU$19.43 per share on ASX. With this, Fortescue shares climbed over 15% in last one month but decreased by 2.12% YTD.

Newcrest Mining Limited

Newcrest Mining Limited (ASX:NCM), is an ASX-listed firm, which is involved in exploration, development, mining and sale of gold.

On 4 August 2022, the company had announced that remediation efforts were underway to address instability found in a ventilation rise at its Cadia mine; these efforts are not anticipated to impact FY23 output.

 It is to be noted that underground mining is temporarily put on hold and it is expected to resume soon after work to backfill the rise has been finished.

With a strong commitment to maintaining the safety of its employees and the community, Newcrest is monitoring and resolving this issue with the necessary level of caution.

With the presentation of Newcrest's Full Year Financial Results, the company will provide an update on operations on 19 August 2022.

Meanwhile, shares of Newcrest ended the day on a negative note. The company's shares were 0.88% down, closed trading at AU$19.08 per share on ASX today. However, the shares have grown 2.25% in the last month but are down more than 22% on a YTD basis.

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Mineral Resources Limited

Mining services firm Mineral Resources Limited (ASX:MIN) has a lithium and iron ore mining operations portfolio.

On 28 July 2022, the company shared its quarterly explorations and mining activities report for April-June 2022.

Key highlights of the report:

  • A record 274Mt in output for FY22 was achieved by Mining Services during the quarter, just shy of the guidance range of 275-290Mt.
  • 7M wet metric tonnes (wmt) of iron ore were shipped throughout the quarter. The 19.2 million wmt of iron ore shipped in FY22 exceeded the projection range of 18.5 to 19.5 million wmt and was 11% higher than in FY21.
  • Costs (CFR ex-royals) for Utah Point and Yilgarn will be between AU$80 and AU$88 per wmt, in line with the forecast for FY22.
  • The quarter's average realised iron ore price, which is 62% of the Platts 62% IODEX, was US$85.95 per dry metric tonne (dmt), down 15% qoq.
  • The Kemerton Lithium Hydroxide Plant, which the MARBL JV owns, delivered its first product from Train 1 in early July 2022. The completion of Train 2 is going well, and the first product sample is expected in Q2 of FY23.
  • A US$1.25 billion Senior Unsecured Notes issued by MinRes, consisting of US$625 million with an 8% coupon due in 2027 and US$625 million with an 8.5% coupon due in 2030, was successfully completed during the quarter. On 20 June, MinRes was also included in the S&P/ASX 50 index.
  • During the quarter, Mt Marion produced 128k dmt and shipped 141k dmt of spodumene concentrate. Spodumene concentrate was transported in an amount of 442k dmt during FY22, slightly below the target range of 450–475k dmt.

 


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