3 Mining Giants – ASX: BHP, ASX: RIO And ASX: FMG

  • Nov 20, 2018 AEDT
  • Team Kalkine
3 Mining Giants – ASX: BHP, ASX: RIO And ASX: FMG

BHP Group Limited (ASX: BHP)

BHP Group Limited (ASX: BHP), formerly known as BHP Billiton Limited is a world-leading resources company which is involved in the extracting and processing of minerals, oil and gas. On 19 November 2018, the company settled its longstanding transfer pricing dispute with the Australian Taxation Office (ATO). To settle its dispute with ATO, BHP will have to pay around AUD$529 million in additional taxes and out of which it has already paid A$328 million. In the September quarter, the copper equivalent production of the company increased by 2% despite maintenance across the several operations. As at 30 September 2018, the company was having five major projects under development which are having a combined budget of US$10.6 bn. Due to the electro-winning plant outage at Spence and acid plant outage at Olympic Dam, the total copper production guidance of FY 2019 reduced by approximately 3%. In the last six months, the share price of BHP decreased by 4.54 percent as on 19 November 2018. BHP’s shares traded at $32.690 with a market capitalization of circa $104.06 billion as on 20 September 2018.  

RIO Tinto Limited (ASX: RIO)

RIO Tinto Limited (ASX: RIO) strategic progress was very strong in the September quarter of 2018 with the announcement of the additional $3.2bn of share buy-backs, and the signing of a binding conditional agreement to exit Grasberg for $3.5bn. The Mined copper production of the company in September quarter increased by 32% to 159.7 thousand tonnes due to the increased production from Rio Tinto Kennecott due to higher grades. The company recently completed its off-market buy-back, achieving its share purchase target of approximately 41.2 million Rio Tinto Limited shares, for a total consideration of A$2,871 million. In the first half of FY 2018, the underlying EBITDA of the company was $9.2bn and operating cash flow was $5.2bn. The company was having Operating cash flow of $5.2 billion and Free cash flow of $2.9 billion in H1 2018. In the last six months, the share price of the company decreased by 6.54 percent as on 19 November 2018. RIO’s shares traded at $79.880 with a market capitalization of circa $32.76 billion as on 20 November 2018.

Fortescue Metals Group (ASX: FMG)

Fortescue Metals Group (ASX: FMG) recently released its September quarter results in which the company reported iron ore shipments of 40.2 mt and cash production costs of US$13.19 per wmt. During the September quarter, the company announced the establishment of an on-market share buy-back program for up to $500 Mn which will be funded from operating cash flows. At the end of the September quarter, the company was having US$972 Mn worth of cash in hand and net debt of US$3.0 bn. In FY 2018, the company reported an Underlying net profit after tax of US$1.1 billion and Underlying EBITDA of US$3.2 billion. The Revenue of the company decreased by 18 percent in FY 2018 as compared to FY17 mainly due to the reduction in average iron ore price. The Guidance for FY19 is targeting a total shipments between 165-173mt, cash production costs between US$12-13/wmt and total capital expenditure of US$1.2 billion. In the last six months the share price of the company decreased by 14.01 percent as on 19 November 2018. FMG’s shares traded at $4.080 with a market capitalization of circa $12.6 billion as on 20 November 2018.


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