|Bid||897.80 x 0|
|Ask||898.60 x 0|
|Day's Range||891.80 - 907.20|
|52 Week Range||575.00 - 993.80|
|Beta (5Y Monthly)||0.69|
|PE Ratio (TTM)||17.65|
|Earnings Date||Aug. 20, 2020|
|Forward Dividend & Yield||0.12 (1.31%)|
|Ex-Dividend Date||Apr. 23, 2020|
|1y Target Est||11.28|
(Bloomberg Opinion) -- Lockdowns imposed to control the coronavirus have battered China’s appetite for everything from coal to copper, pushing stockpiles of raw materials higher and global prices lower. The next crunch could come from supply. The risk of an outbreak is growing in ill-prepared producer countries, with mandatory quarantines and border shutdowns threatening to choke off production.Prices of bulk commodities are already seeing some support from such disruptions, as ports and mines close. Coking coal in particular has outperformed owing in part to Mongolia’s decision in late January to seal its border with China, which cut off a key source of supply. The impact may be only short term. With factory shutdowns spreading through the U.S. and Europe, the reduction in wider metals supply would need to be dramatic to offset crumbling global demand. Upheaval could provide some price support regardless.Appetite for virtually all commodities has slumped since January, when the extent of damage from the novel coronavirus became clear. Even where mills, smelters and factories stayed open, that largely translated into crammed warehouses. China’s industrial production, investment and retail sales for the first two months of the year plunged across the board, with construction particularly weak. China’s economy is now all but certain to contract in the first quarter from a year earlier.With European automakers and other manufacturers shuttering operations, the drop in commodity demand in the first three months is likely to be even worse than during the global financial crisis. Steel demand will fall more than a fifth, copper will slide 14% and aluminum almost a third, analysts at BMO Capital Markets estimate.It hasn’t helped futures prices that the latest wave of closures is coming as we head into the second quarter, usually a peak period for demand. China, by contrast, was worse hit during the quieter Lunar New Year. Copper, a bellwether of confidence in global manufacturing, has tumbled to four-year lows of around $4,800 per metric ton on the London Metal Exchange.Travel and quarantine restrictions have already damaged supply, making it harder for miners to fly employees in and out and impeding projects under construction. Peru’s quarantine has already prompted Anglo American Plc to stop all nonessential work at its $5 billion Quellaveco project and withdraw most of the site’s 10,000 staff and contractors. Canada’s Teck Resources Ltd. has suspended work at its Quebrada Blanca Phase 2 in Chile, while Rio Tinto Group says work has slowed on its underground mine at Oyu Tolgoi in Mongolia.Lockdowns may be even more severe. Copper mines are among the worst affected as Chile and Peru, the world’s top two producers, scramble to contain the virus, prompting Anglo American, Antofagasta and others to send staff home. Chilean state behemoth Codelco will work at reduced capacity for two weeks, while workers at BHP Group’s Escondida, the world’s largest copper mine, threatened action to compel the company to take more preventative steps. The miner said Saturday it would reduce the number of contractors onsite. Analysts at Bank of Nova Scotia estimate a two-week halt in operations in those two countries would amount to 325,000 tons of lost production — roughly 4% of their combined annual output. This serves to underline the geographical concentration of a handful of key materials. Lithium is produced mainly in Chile and Australia, while iron-ore exports are dominated by Australia and Brazil. The price surge after last year’s Vale SA dam disaster shows what a port closure could do to the iron-ore market, though such a move appears unlikely given the huge budget contribution that the material makes to Brazil and Australia.Many producer countries are developing economies and ill-equipped to handle an epidemic that has floored even the world’s richest nations. In Brazil, the response has been patchy at best, with some states taking measures that are increasingly at odds with the federal government. Poorly implemented lockdowns, as seen in the Philippines, could push thousands of casual workers out of cities in search of work in more remote areas — potentially extending the spread.If more drawbridges are raised, expect supplies from explosives and tires to heavy equipment to get blocked, hampering even mining operations that could otherwise keep going. In the meantime, low prices will hurt some higher-cost projects, though rock-bottom prices for oil, a significant input, will cushion the blow. This will affect smaller producers first, given the healthy balance sheets of big miners. Still, operations like Rio’s Pacific Aluminium, or pricey U.S. copper mines, look vulnerable.Demand was the first part of an unprecedented crunch for the global commodities industry. The second act is only beginning. This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Clara Ferreira Marques is a Bloomberg Opinion columnist covering commodities and environmental, social and governance issues. Previously, she was an associate editor for Reuters Breakingviews, and editor and correspondent for Reuters in Singapore, India, the U.K., Italy and Russia.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
It's been a good week for Antofagasta plc (LON:ANTO) shareholders, because the company has just released its latest...
MOSCOW/LONDON/MELBOURNE, March 18 (Reuters) - From using drones for field inspections to stockpiling cyanide, miners are scrambling to maintain output amid the coronavirus pandemic, a task made trickier in underground mines where social distancing is nearly impossible. While miners have faced some outages, due to government shutdowns in places like Peru and Mongolia, most production continues. In a defensive step, miners have begun stockpiling fuel, hydrofluoric acid, lime and other industry staples, including cyanide, which is used to extract gold from rock.
NEW YORK, NY / ACCESSWIRE / March 17, 2020 / Antofagasta Plc (LSE:ANTO.L) will be discussing their earnings results in their 2019 Second Half Earnings call to be held on March 17, 2020 at 10:00 AM Eastern ...
(Bloomberg Opinion) -- A combination of hefty dividends and contracting output is turning the world’s second-largest miner into the poster child for a $1.5 trillion industry’s growth quandary.Rio Tinto Group announced a record $3.7 billion final dividend Wednesday, adding to $11.9 billion of cash returns already paid in 2019. Yet it produced less iron ore, copper and aluminum, leaving market prices to lift underlying earnings by 18%. Rio’s Pilbara operations stumbled early in the year. Its Mongolian copper mine, a key source of future production and the basis of a greener portfolio, is now not only sorely overdue and over-budget, but also tangled in international tax arbitration. The $86 billion mining giant isn’t alone. High dividend yields and pedestrian output have begun to define resources heavyweights that used to be known for the exact opposite. Diversified groups relied on their varied sources of cash to expand, but large-scale opportunities are scarcer than ever, and portfolios look far less diverse too, once coal and other less appealing assets have been carved off. At Rio, iron ore now accounts for three-quarters of its underlying Ebitda.For investors, it hasn’t been all bad news. Since Chief Executive Officer Jean-Sebastien Jacques took the helm in 2016, Rio’s total return including reinvested dividends adds up to an impressive 112%, outpacing most rivals.Yet much of that is due to generous payouts. For a company that digs stuff up for a living, this may not be sustainable — especially for one that aims to build a portfolio better aligned with a carbon-light global economy. It may also be an indication of just how hard it is to change. Rio paid shareholders in 2019 more than double its capital expenditure budget for the same year.One priority has been copper. Under Jacques, head of that unit until he became CEO, Rio has said it wants to add more of the red metal as its existing mines age, and will look at other green ingredients, those for rechargeable batteries and the like. Yet a unit set up to consider just such deals hasn’t sealed a single one despite considering more than 200 opportunities, and the company has suffered blow after blow in Mongolia. Its Oyu Tolgoi mine in the South Gobi accounts for only a fraction of Rio’s value today, but could dictate the company’s fortunes. So far, it’s mostly an unhelpful headache. The mine, which Rio holds through Canada-listed Turquoise Hill Resources Ltd., is one of the largest copper deposits around, and could produce an annual 550,000 metric tons of copper, almost as much as Rio produced last year, plus 450,000 ounces of gold. In the parlance of big miners, it moves the needle.Unfortunately, it also encapsulates everything that makes such projects so challenging: tough geography, messy local politics and complex geology. The cost of the largest, underground, portion has swelled to as much as $7.2 billion, and could rise again when a final estimate is published later in 2020. First production may now be be 30 months later than predicted. Fears of a cash call have dragged down Turquoise Hill shares.In the latest development, Rio announced last week it would begin arbitration proceedings to solve a tax dispute. Few arbitration deals yield significant victories — ask Barrick Gold Corp. and Antofagasta Plc, which won a $5.8 billion ruling against Pakistan last year — and they tend to irk host governments, so it’s a worrying sign. The risk is that Oyu Tolgoi becomes Rio Tinto’s own version of Freeport-McMoRan Inc.’s Indonesian pride and joy, Grasberg – wonderful in theory, nearly impossible in practice.Rio won’t drop Mongolia, and not just because of Jacques’ own attachment to the project. A copper option, however long-dated, is valuable, even if the company doesn’t yet jump in to buy out Turquoise Hill minority shareholders.But what then? Rio has manageable debt and ample cash — $9.2 billion in free cash flow in 2019, the highest level in almost a decade — and deals look cheaper as shares in copper-heavy Freeport and First Quantum Minerals Ltd. have roughly halved since 2018. Perhaps, though, not cheap enough to warrant wrestling with Freeport’s U.S. liabilities or First Quantum’s Zambian operations.Rio isn’t shrinking quite yet. It has exploration projects, and iron-ore production already did better in the second half, albeit still short of the company’s ultimate target. Yet with Oyu Tolgoi mired in arbitration and geological complexities, and the economy swiftly shifting, it might be time for Rio to consider just how creative it can get.To contact the author of this story: Clara Ferreira Marques at firstname.lastname@example.orgTo contact the editor responsible for this story: Matthew Brooker at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Clara Ferreira Marques is a Bloomberg Opinion columnist covering commodities and environmental, social and governance issues. Previously, she was an associate editor for Reuters Breakingviews, and editor and correspondent for Reuters in Singapore, India, the U.K., Italy and Russia.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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Two weeks ago, Antofagasta said the protests could cut its production for the year by about 5,000 tonnes, equivalent to less than 3% of third quarter output, due to delays in supplies and travel disruptions for workers. The London-listed miner said it now expects annual copper production of 750,000 to 770,000 tonnes compared with a prior forecast of 750,000 to 790,000 tonnes. The revised forecast also includes a loss of about 4,000 tonnes from worker strikes at its Antucoya mine that Antofagasta said have ended.
The company, whose flagship mine Los Pelambres is 240 km north-east of Chilean capital Santiago, said the unrest could lead to problems with delivering supplies and employees to site and could hit output to the tune of about 5,000 tonnes. The capital of the country has seen thousands of people holding successive, peaceful demonstrations this week, demanding an end to low wages and a high cost of living. Antofagasta, which operates four mines in the South American country, reported third-quarter production of 197,000 tonnes, up from 188,300 tonnes in the year-ago period, but 0.8% lower than the previous quarter.
The FTSE 100 company reduced its annual forecast for net cash cost, a measure of cost of production per pound of copper produced, to $1.25 per pound as it expects to benefit from a weaker Chilean peso and higher by-product prices. Antofagasta, which is majority-owned by Chile's Luksic family, primarily mines copper with by-products of gold, molybdenum and silver. The company said copper production for the quarter was 198,600 tonnes compared with 163,200 tonnes, a year earlier and maintained its full-year copper production forecast of 750-790,000 tonnes.
“Now mining companies are taking the water,” she says, pointing to dead grass around stone ruins that once provided a nighttime refuge for shepherds. Atacama has become one of the busiest mining districts on the planet in the intervening decades, following discoveries of massive deposits of copper and lithium. In recent years that mining has intensified, thanks to booming demand for lithium, which is indispensable in the production of rechargeable batteries for electric vehicles.