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Highlights:
- The benchmark S&P/ASX 200 closed 1.21% lower to 6,961.80 on Tuesday (23 August 2022).
- Nine out of eleven significant sectors ended lower, with Consumer Staples sector leading the losses.
- Energy and Utilities managed to end tad higher today.
- The Materials sector ended 0.08% lower at 16,365.3 points.
Mining is a well-established sector in Australia. The Australian land is a rich source of metals and minerals such as iron ore, copper, gold, lithium, uranium, etc. Therefore, the mining sector contributes a good percentage of revenue to the country’s economy.
Some of the leading ASX-listed mining companies are:
- BHP Group Limited (ASX:BHP).
- Rio Tinto Limited (ASX:RIO).
- Fortescue Metals Ltd (ASX:FMG).
- Newcrest Mining Limited (ASX:NCM).
- South32 Limited (ASX:S32).
Meanwhile, on the ASX, most of the sectors under the S&P/ASX 200 index have closed in the red territory.
However the S&P/ASX 200 Materials sector (INDEXASX:XMJ) ended just tad lower and closed 0.008% lower at 16,365.3 points on the ASX today.
What is going on in the commodity industry?
Of late, the Australian resource sector has been witnessing volatility in the market. There are several factors that are responsible for the volatility in the commodity industry in Australia. One of such significant factors is the rising supply and demand of resources such as iron ore, lithium, and nickel worldwide.
Iron ore:
The iron ore industry is one of the most promising industries in Australia. However, experts predict that the rising tension between China and Australia is likely to threaten the sector.
China is considered the largest consumer of iron ore in the world. The giant steel projects on in China require the maximum amount of iron ore in the world. However, the conflict between both the countries regarding Beijing’s sovereignty claim over the majority of the South China Sea and Australia’s initiative to develop a nuclear-powered submarine is likely to impact the iron ore industry of Australia.
As a result, China has now reduced its iron ore impacts significantly in 2022, with only 345 million tonnes in the first quarter of the year. It represents a decline of 7.3% on a year-on-year basis.
Lithium:
Australia is witnessing a heavy demand for lithium and nickel as both elements form a significant part of Electronic Vehicles batteries. As a result, the shares of lithium-producing companies in Australia are performing well on most of the days on the ASX.
Nickel:
As per a recent media house report, Australian miners are desperately looking for nickel reserves in the country in order to meet the demands of the metal needed for EV batteries.
Here in this article, we have discussed the performance of five leading ASX- listed mining stocks- BHP Group, Rio Tinto, Fortescue Metals, Newcrest, and South32 on the ASX.
BHP Group Limited (ASX:BHP)
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Australian petroleum giant BHP Group Limited (ASX:BHP) shares ended today’s trading session at AU$41.460 per share, up 0.266% on the ASX.
Over the last 12 months, BHP’s share price has fallen by 7.70% on the ASX. Furthermore, the company’s year-to-date based share price fell 2.17% today.
BHP recently released its fully audited financial results and trading updates for FY22 on the ASX. BHP’s profit from operations gained significantly by 34% compared to the previous corresponding period. The company’s net operating cash flow and free cash flow in the given period were US$29.3 billion and US$24.3 billion in FY22 respectively. The surge in profit from operations was driven by rising prices of coal and copper and strict management of operating costs.
The board of BHP has determined to pay a final dividend of 175 US cents per share or US$8.9 billion to its eligible shareholders, based on its FY22 earnings.
Rio Tinto Limited (ASX:RIO)
Today the shares of the leading iron ore producer, Rio Tinto Limited (ASX:RIO) closed its trading session slightly 0.539% lower at AU$97.660 per share on the ASX.
Within the last 12 months, Rio’s share price has declined almost by 10% on the ASX. In addition to that, Rio’s YTD-based share price declined over 2% on the ASX today.
Rio Tinto has recently shared that Turquoise Hill Special Committee has terminated Rio’s review work related to the non-binding proposal for the complete acquisition of Turquoise Hill for CA$34 in cash per share of Turquoise Hill shares.
Rio initially laid down the proposal of fully acquiring Turquoise Hill on 14 March 2022.
Fortescue Metals Group Ltd (ASX:FMG)
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Vertically integrated green energy and resource company Fortescue Metals Group Ltd (ASX:FMG) shares closed at AU$19.04 per share after losing marginally by 0.314% on the ASX today.
In a time-frame of a year, Fortescue’s share price has marked a loss of about 4% on the ASX. Meanwhile, Fortescue’s YTD-based share price marked a loss of over 4% on the ASX as of 23 August 2022.
Newcrest Mining Limited (ASX:NCM)
Renowned Australian gold miner Newcrest Mining Limited (ASX:NCM) shares buzzed on the green zone and closed marginally higher today. Newcrest’s share price stood at AU$18.62 per share after gaining by 0.703% on the ASX today.
The gold miner’s share price has fallen significantly by almost 27% on the ASX in the last 12 months. On the other hand, Newcrest’s YTD-based share price marked a loss of approximately 24% on the ASX today.
Last week, Newcrest Mining released its FY22 results that reflected a strong balance sheet. The company delivered a statutory profit and an underlying profit of AU$872 million in FY22. Newcrest reported generating AU$1,680 million as cash flow from operating activities in FY22. The company ended the financial year with a strong balance sheet and significant liquidity that will allow the company to grow.
Driven by robust earnings in FY22, the board of Newcrest will be paying a final dividend of 20 US cents per share to its eligible shareholders.
South32 Limited (ASX:S32)
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Diversified metal and mining firm, South32 Limited (ASX:S32) shares fell by 1.435% lower to AU$4.12 per share by the end of today’s trading session on the ASX.
South32’s share price registered a gain of around 43% on the ASX in the last 12 months. On the other hand, the mining company’s YTD-based share price gained by 1.23% on the ASX today.
South32 released its FY22 operational results on 25 July 2022. The company revealed that its copper equivalent production in FY22 was 99% of its current guidance because most of its operations have followed revised plans despite experiencing weather-related impacts and labour shortages due to COVID-19. Nonetheless, the company anticipates reporting its FY22 operating cost aligned to its previously updated guidance at the majority of its operations.
