Tag Archives: Iron Ore Mining (TRBC level 5)

MELBOURNE (Reuters) – Fortescue Metals Group increased its dividend payout Thursday, but the boom in costs at a major development project in Western Australia is tarnishing its ambition to become a green energy powerhouse.

FILE PHOTO: The Australian Fortescue Metals Group (FMG) logo can be seen on bulk carriers loading iron ore in the coastal city of Port Hedland in Western Australia, 29 November 2018. Image taken 29 November 2018. REUTERS / Melanie Burton

The world’s fourth-largest iron ore miner now estimates the cost of its Iron Bridge magnetite project to be $ 3 billion, $ 400 million more than previously estimated as it delays first production to the second half of 2022 from the first half.

Earlier this week, Fortescue announced the resignation of its chief operating officer and two iron ore executives as part of a 12-week review of the high-grade ore project – a major part of the miner’s strategy to upgrade its product to win market share. and meet China’s preference for high quality ore.

“With (the review) underway, we have limited confidence in the new guidance,” RBC said in a report, while Moody’s called the swelling, caused by increased labor and logistics costs, “credit negative.”

The project is expected to produce 22 million tonnes when fully upgraded.

An update to the project was made with the miner’s first-half earnings report on Thursday which posted a 66% jump in profit, a record dividend and boosted its annual delivery forecast.

“I think what has happened in the last 24-48 hours has indeed given the market pause on its plans to deliver new projects, new technology overseas,” said UBS analyst Glyn Lawcock.

“(But) the market is very surprised by the fact that they are getting good payouts. I think the market is concerned about the jump in capital spending on Iron Bridge, commitments to spend more on renewable energy, and to reduce dividends. “

Joining BHP Group and Rio Tinto counterparts in giving investors the benefit of strong iron ore prices back, Fortescue announced a higher-than-expected interim dividend of A $ 1.47 per share, up from A $ 0.76 last year. .

China’s focus on infrastructure last year pushed up iron ore prices by more than 50%.

GREEN AMBITION

Fortescue last year embarked on an aggressive plan to develop a worldwide renewable energy project, called Fortescue Future Industries, and led by billionaire founder and largest shareholder Andrew Forrest, known as “Twiggy”.

Forrest, Australia’s second richest person, saw his personal fortune grow by A $ 1.65 billion ($ 1.28 billion) on Thursday thanks to his 36.3% stake in the company.

Among the projects are ammonia and hydrogen, and technology to use hydrogen produced from renewable energy to make steel, which is now one of the most polluting industries in the world.

Fortescue disclosed details of funding for FFI, with an allocation of 10% of net profit after tax, or approximately $ 400 million, to fund renewable energy growth, and another 10% to fund other resource growth options.

Despite the green push, Fortescue has refused to follow its counterparts Rio Tinto and Glencore who this week said they would set a coverage target of 3 to reduce customer emissions. Gaines said Fortescue was focused on reducing emissions on a “global scale”.

Fortescue’s first-half profit after tax was $ 4.08 billion, up from $ 2.45 billion a year earlier. This is in line with a $ 4.09 billion consensus of 10 analysts put together by research firm Vuma Financial.

Iron ore shipments are estimated to be in the range of 178-182 million tonnes for the financial year, up from the previous range of 175-180 million tonnes. Its stake was up 1.9% to A $ 24.88.

($ 1 = 1.2897 Australian dollars)

Reporting by Sameer Manekar and Rushil Dutta in Bengaluru; Edited by Arun Koyyur and Jacqueline Wong

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Australia

Fortescue Australia increases the cost estimates for the main project, declaring big dividends | Instant News

February 18, 2021 NewsDesk

MELBOURNE (Reuters) – Fortescue Metals Group on Thursday raised its cost estimates and postponed the timeframe for its main Iron Bridge Magnetite project in Western Australia, while announcing higher returns and big dividends.

The world’s fourth-largest iron ore miner now expects the total project cost to be $ 3 billion, $ 400 million more than previously estimated, and is delaying first production to the second half of 2022 from the first half.

The project is expected to produce 22 million tonnes when fully upgraded.

As part of a review of the high-grade ore project, a key part of Fortescue’s strategy to improve its products and win market share, the company earlier this week announced the resignation of its chief operating officer and two other executives in its iron ore division. .

An update was made in the miner’s first-half earnings report on Thursday in which it boosted its annual delivery forecast and reported a 66% jump in profit.

“I think what has happened in the last 24-48 hours has indeed given the market pause on its plans to deliver new projects, new technology overseas,” said UBS analyst Glyn Lawcock.

“(But) the market is very surprised by the fact that they are getting good payouts. I think the market is worried about a surge in capital spending for Iron Bridge, a commitment to spend more on renewable energy and so that dividends can be reduced, “he added.

Fortescue also announced a higher-than-expected interim dividend of A $ 1.47 per share, up from A $ 0.76 last year, joining BHP Group and Rio Tinto counterparts in benefiting investors from rising iron ore prices.

China’s focus on infrastructure last year prompted a more than 50% rise in iron ore prices, which hit a record in December on the China’s Dalian Commodities Exchange.

The payment sent a windfall of A $ 1.65 billion to the company’s largest shareholder, Andrew Forrest who is Australia’s second richest person with a net worth of A $ 23 billion, according to Forbes.

The stock was up 2.6% to A $ 25.04.

Fortescue estimates iron ore shipments will be in the range of 178-182 million tonnes for the financial year, up from the previous range of 175-180 million tonnes.

Net profit after tax for the first half was $ 4.08 billion, up from $ 2.45 billion a year earlier. This is in line with a $ 4.09 billion consensus of 10 analysts put together by research firm Vuma Financial.

Fortescue said it would allocate 10% of its net after-tax profit to fund renewable energy growth through its new unit, Fortescue Future Industries (FFI) and 10% to fund other resource growth opportunities.

Reporting by Sameer Manekar and Rushil Dutta in Bengaluru; Edited by Arun Koyyur and Jacqueline Wong

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Brazil

Vale Brasil, Minas Gerais state is nearing completion of the $ 7 billion disaster | Instant News

February 3, 2021 NewsDesk

FILE PHOTOS: View of the collapse of a tailings dam belonging to Brazilian mining company Vale SA, in Brumadinho, Brazil February 13, 2019. REUTERS / Washington Alves

RIO DE JANEIRO (Reuters) – Brazilian miner Vale SA and authorities in the state of Minas Gerais said on Wednesday that they had set out potential settlement requirements regarding the 2019 mining disaster, with a source saying the deal was worth around 37 billion reais ($ 6, 89 billion).

A dam containing mining waste exploded in January 2019 at the Vale facility in the town of Brumadinho in Minas Gerais, releasing a torrent of mud that killed some 270 people.

In a statement, Minas Gerais officials, along with state and federal prosecutors, said the terms would be further discussed at a meeting set on Thursday, when a deal could potentially be signed. Neither Vale nor officials commented on the value of the deal.

A person familiar with the negotiations, who declined to be identified as the talks closed, told Reuters the current terms involved Vale spending about 37 billion reais to compensate for the disaster.

Vale shares rose after authorities announced the deal was closed and were up more than 3% in afternoon trade, compared to about 1% gain in the overall Bovespa index.

The deal will require investment by Vale in the area affected by the Brumadinho disaster, state officials said.

The settlement will not stop individual claims against Vale, including criminal lawsuits, from moving forward, they said.

In a separate statement, Vale said “a meeting is scheduled for Thursday for a final agreement and a possible signing of a reparations agreement, with investment and action in the affected region and population.”

($ 1 = 5,3684 reais)

Reporting by Marta Nogueira in Rio de Janeiro; Additional reporting by Gabriel Araujo; Written by Gram Slattery and Jake Spring; Edited by Richard Chang and Matthew Lewis

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Brazil

Vale Brasil is close to a $ 7 billion deal to solve the mining disaster, sources said | Instant News

February 3, 2021 NewsDesk

FILE PHOTOS: Brazilian mining company Vale SA logo and trading symbol displayed on screen on the New York Stock Exchange (NYSE) in New York, USA, December 6, 2017.REUTERS / Brendan McDermid / File Photo

RIO DE JANEIRO (Reuters) – Brazilian miner Vale SA is close to a 37 billion reais ($ 6.88 billion) deal with the state government of Minas Gerais to settle a claim for a mining disaster that killed about 270 people, a source familiar with the negotiations told Reuters.

Another meeting is arranged between state authorities and Vale on Thursday to further discuss the settlement related to the dam that exploded in the town of Brumadinho in January 2019, burying people in mining waste.

($ 1 = 5.38 reais)

Reporting by Marta Nogueira; Edited by Chris Reese

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Brazil

UPDATE 1-Bahia Mineracao Brazil begins production in iron ore mine – CEO | Instant News

February 3, 2021 NewsDesk

(Added more chief executive comments)

RIO DE JANEIRO, February 2 (Reuters) – Brazilian miner Bahia Mineracao, a subsidiary of Kazakhstan’s Eurasian Resources Group, started production at a mine in northeastern Brazil with an estimated 2021 production of 1 million tonnes of iron ore, its chief executive said on Tuesday.

Bahia Mineracao plans to double production at the Pedra de Ferro mine in the state of Bahia to 2 million tonnes of iron ore next year, CEO Eduardo Ledsham said in an interview.

The mine delivered its first ore cargo in January, with first-quarter sales to the domestic market only, Ledsham said. Foreign deliveries are expected to start in April, he said.

The company plans to invest 4 billion reais ($ 746.41 million) to increase its annual production capacity to 18 million tonnes in five years, he said.

“I see that we are heading for a new cycle of high iron ore,” Ledsham said of the demand for the metal, especially from China.

As part of the planned capacity expansion, the company will rely on the first segment of the East-West Integration Railway (Fiol), which is not yet operational. On April 8, the government plans to auction off a 35-year concession to operate a railroad linking to the coast.

Ledsham said Bahia Mineracao planned to participate in the auction in partnership with other investors, but declined to elaborate.

Fiol will be connected to a port in the coastal city of Ilheus which is under construction and will be jointly operated by Bahia Mineracao and the state government of Bahia.

Early shipments of iron ore were shipped by road.

The Pedra de Ferro mine has reserves of around 550 million tonnes of ore, about one-third of which is hematite which contains about 65% iron content. ($ 1 = 5,3590 reais) (Reporting by Marta Nogueira Writing by Jake Spring; Editing by Richard Chang)

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