Top Court Turns Down Fortescue’s Appeal Over Indigenous Land

  • Jun 01, 2020 AEST
  • Team Kalkine
Top Court Turns Down Fortescue’s Appeal Over Indigenous Land

Summary

  • A top court has dismissed Fortescue Metals Group’s  appeal concerning the ruling by the Federal court in 2017 against the legal battle lost by the miner in July 2017 related to Aboriginal land, where Solomon iron ore mine of the Company is located in the Pilbara region.
  • The Yindjibarndi Aboriginal Corporation- the group represented the indigenous community, and the ruling came amidst ongoing talks of reform across the continent related to providing mining rights of lands belonging to either heritage site or related to the Aboriginal community.
  • However, FMG is providing considerable support to the Aboriginal community, and the market seems to be cherishing the stock over the ongoing supply constraints in the iron ore market amidst robust demand, recovering steel prices, and falling inventory in China.

Fortescue Metals Group Limited (ASX:FMG) is once again coming into the focus and breaking headlines across many media houses after a top court dismissed an appeal by the Company against the legal battle lost by the miner to an indigenous group.

On 20 July 2017, the Company lost a legal battle against the Aboriginal group, which left the iron ore miner with hundreds of millions of dollars in compensation expenses after the Federal court ruled out that the Yindjibarndi people possess exclusive native rights on the land on which FMG’s Solomon iron ore mine is located at the Pilbara region.

The Yindjibarndi Aboriginal Corporation- the group which represented the indigenous community and who is in the longstanding battle over the rights on the land which expands over 2,700 sq km (or 1,040 sq miles) and on which the Solomon hub is located, would now seek for the compensation for economic loss and spiritual harm.

The ruling from the top court came amidst ongoing talks of reform across the continent related to providing mining rights of lands belonging to either heritage site or related to the Aboriginal community.

To Know More, Do Read: Rio Tinto Under Community Backlash After Blasting Indigenous Site

While there has been a community backlash in place over the miner, recently, FMG has suggested that the Company is continuing its longstanding commitment to supporting local and Aboriginal businesses; and,  

  • In the status quo, FMG offered Cundaline Resources Pty Ltd, an indigenous business established by the Tylor family from the Njamal people in the Pilbara region, a contract for the West Canning Basin earthworks at the Iron Bridge Magnetite Project.

 

Cundaline, a wholly owned Aboriginal-owned company, would undertake the earthworks at the Iron Bridge project.

Furthermore, under the guaranteed leasing facility with ANZ, the Company has committed $20 million of financial support for nine Aboriginal contractors.

 

 

In the middle of all courtroom spectacle, the market seems to be favouring the Company with prices of FMG rising sharply during the day’s session on 29 May 2020 to end the session 2.81 per cent up against its previous close on ASX. Even on 1 June 2020, the stock managed to scale a new 52 Week high $14.430, up over 3 per cent.

To Know More, Do Read: Iron Ore Futures At 15-Week High, FMG Hits All time High- ASX Iron Ore Stocks on Upswing

In the status quo, the supply shortage of iron ore from Brazil along with robust steel demand, rising prices, and falling inventory in China seem to be fuelling investors’ sentiment over ASX-listed iron ore stocks.

To Know More, Do Read: Top Five Metals & Mining Performers with Returns More Than ASX200

Price Actions and Market Sentiments

In the past few trading sessions, the stock has gained a sentiment splash with stock skyrocketing from the level of $8.200 (intraday low on 13 March 2020) to the record level and a new 52-week high of $14.430 on 1 June 2020), which marks a price appreciation of ~ 75 per cent.

To Know More, Do Read: FMG contours New Record High While ASX-Listed Iron Ore Titans BHP and Rio See Gap Up Session

 

FMG Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

FMG Daily Chart (Source: Refinitiv Eikon Thomson Reuters)

 

On the daily chart, it could be seen that the stock is currently taking the support at the mean value of the 20-day simple Bollinger band, which is a 20-day simple moving average and is currently surging. It could be seen that while the stock is showing a positive price action, the 12,26,9 MACD indicator is showing the early sign of bearish sentiments with spread between the signal and base line reducing and the signal line is coming closer to the base line from above.

Investors should monitor the stock around the previous high of $14.105 as the break and sustain above the same could seed further bullish sentiments. Furthermore, the +1 Standard Deviation of the Bollinger band is also mapping around the same level and should act as the primary resistance for the price ahead.

On the contrary, if the stock faces the resistance of +1 SD, the mean value should act as immediate support, followed by, the horizontal psychological support level of $11.625. The major and decisive support for the stock is at the -1 SD, which is merging with the 200-day EMA, and investors should monitor the stock closely around the observed level as a break below the same could seed and nurture bearish sentiments.

 


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