Iron ore prices are showing a slight correction after a decent up move; however, ASX seems to be favouring iron ore stocks, with most of themmoving in positive territory for the second consecutive trading session.
To Know More, Do Read: Iron ore Prices Beating Market Headwinds as Supply Chain Gets Derailed Thanks to Virus
Rio Tinto Limited (ASX:RIO), Fortescue Metals Group Limited (ASX:FMG),and many other iron ore mining companies across the continent are adopting measures to tackle the stormy market condition, on back of the novel coronavirus outbreak, which in due course turned into a pandemic and hampered global economic activities, leading to a major plunge across the global equity as well as consumption-based commodities front.
ASX-listed Iron ore Stocks Under Positive Territory
- Rio Tinto Limited (ASX:RIO)
Rio has decided to slow down some of its operations in the wake of actions taken by the Premier of Quebec and the President of South Africa in order to contain the COVID-19 spread. The Company decided to curtail the production at Richards Bay Minerals to comply with the measures taken by the Government.
Rio suggested that all mining operations at the Richards Bay Minerals would be put on a hiatus by Thursday midnight, i.e., on 26 March 2020 for 21 days.
The Company would also make arrangements for the furnaces for putting them on a care and maintenance phase to avoid future damage to their operations, and Rio further anticipates that it is too early to suggest a resumption date or 2020 production guidance. Rio also mentioned that it would delay the construction resumption of the Zulti South project; and,
- In Canada, the Premier of Quebec recently announced a closure of all non-essential businesses from midnight on 24 March 2020 to 13 April to contain the spread of the novel coronavirus. However, the Quebec Government has designated industrial complexes and the mining industry as essential industries, albeit, suggested that they must reduce their business activity to the minimum.
Rio suggested that it would comply with the Government in relation to its operations in Quebec, and would further announce the impact, if any, on operations and production in due course.
The stock of the Company last traded at $79.850, up by 1.44 per cent against its previous close on ASX.
- Fortescue Metals Group Limited (ASX:FMG)
FMG responded in relation to the latest announcement from the Western Australia State Government, which suggested strict border controls for all access points by road, rail, air and sea from 1:30PM Western Australia Time on Tuesday, 24 March 2020, which would self-isolate any arrivals from other states across the continent for 14 days; and,
- However, the State Government has advised that essential services and workers, which includes health and emergency services, defence and policing, mining industry workforces, flight crews and freight of essential goods, via ports and trucks, would be exempt from the isolation of 14 days.
FMG suggested that it has incorporated this development in the scenario planning and is closely working with the resources industry and the Western Australia State Government to retain access to the site critical operational roles in order to continue the operations. The Company further suggested that majority of its workforce resides in Western Australia, and it would work closely with the non-resident workforce and taking measures, such as dedicating charter flights direct from the East Coast of Australia to the operational site, to ensure smooth availability of site critical function.
FMG also mentioned that the shipment from Port Hedland in the Pilbara Region along with the mining and processing activity remains in line with the guidance for the financial year 2020, and the Company is working with its team members and contracting partners to ensure the continuity of its major projects. As of now, FMG assesses that there has been no material change in its project schedules and guidance, and if any such disruption emerges ahead, the Company will notify the same.
The stock of the Company last traded at $9.590, up by 0.419 per cent against its previous close on ASX.
- Champion Iron Limited (ASX:CIA)
CIA recently announced that the Board of the Company has decided to not proceed with the re-domicile proposal from Australia to Canada amid the market volatility and global uncertainty in the wake of COVID-19 outbreak.
CIA suggested that in the wake of high volatility and market uncertainty across the globe, it might not be able to realize the benefits associated with the Re-domicile. Also, the Board recognises that the decision is in the best interest towards the shareholders, and it has terminated the scheme of arrangement.
CIA is now seeking the approval from the Federal Court of Australia; however, the Company suggested that the Board may reconsider the re-domicile from Australia to Canada at the later stage, depending upon the market condition.
The Company further assesses that the decision to not shift to Canada would not impact its assets, operations or staff, which is predominant in Quebec, Canada.
The stock of the Company last traded at $1.510, up by 4.49 per cent against its previous close on ASX.
- South 32 Limited (ASX:S32)
S32 advises that the Company is exempt from the lockdown imposed by the South African President aimed at containing the spread of COVID-19, commencing midnight on Thursday 26 March 2020, for 21 days.
However, businesses essential for the maintenance of power generation is exempt from the lockdown, and the Company would work with the Government to determine the impact of this exemption on its South African Energy Coal and South Africa Aluminium operations, which play a vital role in the sustainability of Eskom’s generation network.
S32 is currently seeking clarification related to the South Africa Manganese to determine if the exemption extends to the manganese unit of the Company. S32 has started placing the manganese ore operations and the remaining furnace at the Metalloys alloy smelter into care and maintenance.
S32 has also withdrawn its FY20 guidance for the South African operations and suggested that it would notify the market about the future stance in due course.
The stock of the Company last traded at $1.735, up by 4.20 per cent against its previous close on ASX.
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