Hello Share Thrashers. I’ve not commended Rio Tinto (RIO) to you before but I think it’s become worth a look. Unlike many jumbo miners, this outfit has a keen eye on future trends. And, if ever there was a strong trend that’ll climb even stronger, it’s the increasing support for green types of energy. To this end, Rio seems like an unlikely contender. But not so.
It is a busy world out there, but I will leave all the excitable happenings at NatWest (NWG) to the real experts out there, and talk about some more sensibly managed FTSE 100 corporate names. First up, is British American Tobacco (BATS), which announced its own CEO shift a month or two back. I reckon this was driven by the need to actually start bringing the business deeper into the 2020s, especially as progressively it will be moving away from the world of cigarettes. But even I, as a complete non-smoker, have to acknowledge that it will take a bit of time, as despite a 30% revenue increase year-on-year in 2023, non-combustible offerings are still only 16.6% of the company’s overall sales. However, just like hybrid and/or electric cars, the user market share is only going up.
Whilst I am sure many of you have rolled from eating pancakes yesterday to reading the poetry of T. S. Eliot today, I keep on cracking on with the global corporate earnings season – and this brings me today to Rio Tinto (RIO) and Lloyds Banking Group (LLOY) (one of which I think is cheap and one of which I am glad I do not own).
The good news for all readers is that I am not going to talk about the Bank of England, as we all expected an interest rate rise yesterday. As with most matters in the investment world, what matters a lot more is what happens tomorrow rather than what is happening today (or happened yesterday). And on that basis, some interesting updates this morning from Rio Tinto (RIO), BT Group (BT.A) and Games Workshop (GAW).
I am struggling to remember a Wednesday that was as busy for those of us interested in the world of analysis, fund management and macroeconomics matters over the twenty-six years since I started work, as was yesterday. It was all good fun, even if I ended my day listening to the Federal Reserve believing it was very good at looking after American inflation. More about stocks. Like the analytical weirdo I am, I love listening to at least one live conference call every business day. However yesterday, I lost count of the number of calls I listened to and there were a bunch I passed on because I knew I simply did not have time. First up for me was Reckitt Benckiser (RKT), a company that I mentioned on Tuesday was far more interesting than Unilever (ULVR), which remains very clear after the former’s first half numbers.
There was not too much to be excited about for Rio Tinto (RIO) shareholders today on the publication of its first quarter production results. I remain a big fan of the mining name as I noted a couple of months ago, and whilst its core iron ore business had negative growth this was largely expected and should improve as the year progresses. Apart from very firm metals prices versus historically, the other opportunity for the company over the 2020s remains everything else it is doing – or, as it put it in the update, “we made notable progress during the quarter with the commencement of underground mining at Oyu Tolgoi following a comprehensive agreement reached with the Government of Mongolia, completed the acquisition of the Rincon lithium project in Argentina, and signed a framework agreement at the Simandou iron ore project in Guinea”.
As discussed last month, I am a fan of Rio Tinto (RIO) beyond massive dividends. It was, therefore, pleasing that it today announced it has “completed the acquisition of the Rincon lithium project in Argentina for $825 million, following approval from Australia’s Foreign Investment Review Board (FIRB)”. It makes sense for it to be beyond just iron ore, even if the shares are a touch down today.
Earlier this month HERE, I observed that the ‘Methodist Church threatens to pull stake from Rio Tinto (RIO) over damning sexual harassment report’. I am not sure if its investment committee listened to the mining sector giant’s conference call earlier today but – if it did – it will be pleased with the huge amounts of ESG mentions in the first few minutes of the call. Most investors though will be more excited by the news of ‘record financial results and total dividend of 1,040 US cents per share for 2021, a 79% payout’, equivalent to over a 10% dividend yield. Whilst some of this was a special dividend reflecting remarkable metals sector prices during 2021, how should investors feel now about the FTSE-100 giant with a market cap of just shy of £94 billion?
Another interesting week in the global investment markets. I was certainly very lucky to spend my first five years working in the City between 1996 and 2001 because a whole load of geopolitical, macro and corporate stuff happened during that period. I also visited Russia for the first time during that period. For another time are some insights on what you would have found back then if you were a hungry/thirsty driver on a ‘motorway’ stop in Siberia, but it did at least provide me with some useful PGM industry and related insights. I have always been a bit of a sector fan in any case, which brings me to BHP Group (BHP) numbers today…
I start with KPMG and another scandal but the real scandal is the way it deals with its employees who are fraud enablers by act or by omission or both. Then onto the Methodists and why its stance on Rio Tinto (RIO) is, I suggest, not what Jesus would have advocated. Moreover it highlights how ESG driven investing has created valuation anomalies on both the long and short side. Finally, THG (THG) and PE bid speculation.
It was a busy last week and it is going to be a busy next week too. Such is this time of the year. It’s all good fun. Particularly entertaining – no doubt – will be the conference calls after full year updates from GlaxoSmithKline (GSK) and Unilever (ULVR). Sensibly the former is splitting up its business, whilst the latter really should be considering it a bit more. It will be enjoyable to listen to and react to (after all I own a bunch of shares in GlaxoSmithKline). But today I wanted to talk about Rio Tinto (RIO)…
Shares in mining giant Rio Tinto (RIO) have performed well for me ever since I realised back in October here that ‘investors should focus on China not cultural heritage’. Actually if truth is told, it is more than just China because demand for the iron ore, copper and aluminium exporter is centred on a broader changing world. Or as Rio Tinto put it on a chart in its second quarter numbers a few days ago, ‘we produce materials essentially for a low-carbon future’.
Atalaya Mining (ATYM) has made AGM and Reserves statements, including emphasising “substantial, unexploited mineral resources in the vicinity of our modern 15 Mtpa mill and related infrastructure, together with a very prospective land package with world class exploration potential, offer compelling opportunities for continued growth of our company”. So what’s led to this statement?
About eighteen months ago, I remember reading Gary Newman’s article here on Central Asia Metals (CAML). I started following the name and ended up buying some shares during the dog days in the U.K. market about a month ago. With a nice profit today, do I take it and run or keep on holding for more?
Back in August here, I observed that mining giant Rio Tinto (RIO) had been silly not to square off the various interest groups being a big mining group means you rub up against. I did also observe that ‘the trajectory of the Rio Tinto share price remains centred fully on the demand levels or not from China for iron ore…for all the ESG excitement this situation will induce, that is the cold hard reality’.
So naughty old Rio Tinto (RIO) then. The iron ore, copper and coal name has fessed up that it was naughty in blowing up some ancient rockshelters at Juukan Gorge ‘and have unreservedly apologised to the Puutu Kunti Kurrama and Pinikura people’. After, scrapping some executive bonuses, ponying up A$50 million to ‘attract, develop and retain Indigenous professionals into our company’, as well as giving such groups ‘a greater voice’ in its decision-making process and stating although it ‘cannot change the past…we are absolutely committed to doing better in the future’, right on Rio Tinto, yes?…
The gist of my article a few days ago on dividend behemoths Imperial Brands (IMB) and Royal Dutch Shell (RDSB) was that if either name cut their dividend by half and the shares rose, this would be super bullish. I know that dividend cuts are naturally disliked by income-seeking investors but in a world where I see respected analysts are calculating that '35% of companies in the FTSE All-Share index have cut their dividend in the past 30 days...that’s an even faster pace than when Lehman Brothers collapsed in 2008', you have to get with the backdrop.
This morning BlueJay Mining (JAY) announced that three directors had bought shares. That is a spoof. The amounts are not material and the aim is to try and arrest the share price slide. If anything such spoofing is itself another reason to sell. It gets worse…
Hello Share Twiddlers. Despite the worries of an uncertain world, economically speaking, there have been some jolly signs recently that share prices could move ahead. I know there are warning signals out there to counter any undue optimism, but they don’t seem to be having an effect, do they?
Looking down my shopping list for dividend munchers in the wake of our mini-crash (see HERE) I see fully listed BT (BT.A) on a yield of 6.82%. I’m no expert in these large-caps (so this is NOT a tip!), but that seemed pretty tasty to me and worth a bit of a look – my first port of call being what the ShareProphets large-cap professor, Chris Bailey, had to say (see HERE).
Atalaya Mining (ATYM) the company once known as EMED has served up its Q3 results today and broker Mirabaud is quick off the blocks with a buy note. I know many of our readers are invested here. Though I have no strong view for what it is worth Mirabaud writes:
John Meyer of SP Angel this morning comments on Metal Tiger (MTR), North River Resources (NRRP) and Rio Tinto (RIO) as well as offering a detailed macro view on the news that is shaping global mining and the AIM mining pond.
John Meyer of SP Angel this morning comments on Glencore (GLEN), Anglo American (AAL) and Rio Tinto (RIO) as well as offering a detailed macro view on the news that is shaping global mining and the AIM mining pond.
John Meyer of SP Angel this morning comments on Shanta Gold (SHG), Rio Tinto (RIO) and Vedanta (VED) as well as offering a detailed macro view on the news that is shaping global mining and the AIM mining pond.
John Meyer of SP Angel this morning comments on Anglo Asian Mining (AAZ), Keras Resources (KRS), Coal of Africa (CZA), Orosur Mining (OMI) and Rio Tinto (RIO) as well as offering a detailed macro view on the news that is shaping global mining and the AIM mining pond.
My first tip of the year has to come attached with a mea culpa. I tipped BHP Billiton (BLT) at 1000p a share a few months ago and after a suitable disclosure delay bought stock. Since then I have also bought shares below 900p, below 800p and reasonably recently below 700p per share. The clock does not completely reset with a new year but for those investors who joined me in investing at around the 1000p a share level I offer my apologies…but also my advice to double up now.
John Meyer of SP Angel this morning comments on Base Resources (BSE), Hummingbird Resources (HUM), Kodal Minerals (KOD), Ironridge Resources (IRR), Rio Tinto (RIO) and Wetherley International WTI) as well as offering a detailed macro view on the news that is shaping global mining and the AIM mining pond
John Meyer of SP Angel this morning comments on Anglo American (AAL), Aureus Mining (AUE), International Ferro Metals (IFL) Metminco (MMC) and Rio Tinto (RIO) as well as offering a detailed macro view on the news that is shaping global mining and the AIM mining pond
It is a big week for the FTSE-100’s large cap miners. With the Bloomberg Commodity Index yesterday falling to its lowest level since June 1999 sentiment is – to choose a suitable mining metaphor – crushed. Glencore (GLEN) hosts an investor update on Thursday, Rio Tinto (RIO) has announced new capex cuts ahead of an update from its important aluminium division later today whilst Anglo American (AAL) has updated the stock market this morning.
John Meyer of SP Angel this morning comments on Amur Minerals (AMC), Asiamet Resources (ARS), Beowulf Mining (BEM), Minera IRL (MIRL), Rio Tinto (RIO) and Stellar Diamonds (STEL) as well as offering a detailed macro view on the news that is shaping global mining and the AIM mining pond.
There are some events which transcend normal investment analysis. The shocking scenes of devastation over the last few days from the area around the Samarco iron-ore mine in Brazil following the unintended release of mine tailings received a lot of press coverage. As the co-owner (along with the Brazilian business Vale) BHP Billiton (BLT) correctly in a regulatory disclosure earlier today ‘offered its full support to help the immediate rescue efforts and to assist with the investigation’ and made its ‘immediate priority…the welfare of the Samarco workforce and the local communities’. None of this of course will bring back those who have lost their lives.
John Meyer of SP Angel this morning comments on Anglo Pacific (APF), Connemara Mining (CON) and Rio Tinto (RIO) as well as offering a detailed macro view on the news that is shaping global mining and the AIM mining pond.
Spanish copper producer EMED Mining (EMED) plans to change its name to Atalaya Mining and to implement a one-for-30 share consolidation, as the AIM-quoted company prepares to boost annual production 50% to 7.5 million tonnes a year from the historic Rio Tinto mine near Seville. EMED, whose shares have fallen from a 12-month high of7.98p to 3.875p with copper in retreat, intends to reach that output level by the end of next June and lift it further to 9.5 million tonnes a year six months later -- with expected extraction costs significantly below even today’s depressed copper price.
Well, well, well. For me today’s number one most interesting UK regulatory news update was from Glencore(GLEN). Just nineteen short days ago after listening to the management of the FTSE-100 mining/commodity trading company confirm their faith in their balance sheet and general corporate approach, Glencore have unveiled a range of initiatives including a US$2.5bn of new equity issuance, the suspension of the dividend for at least the next year and various asset sales and mothballing actions to slash US$10bn from their net debt pile. Well I did warn at the above link that Glencore was ‘still too much of a full-on risk situation to get involved – and don’t believe that 9% dividend yield many data providers are highlighting at the moment…Enthusiasts for large cap mining investment should continue to prefer Randgold Resources (RRS)…or…BHP Billiton (BLT)…(companies) with a proper underpinned dividend and little debt’. For the one-line summary this remains my view.
Over the weekend, I identified BHP Billiton (BLT) and Rio Tinto (RIO) as two of the top dividend payers in the FTSE100. Based on Friday’s close BHP’s yield was 7.28% and Rio’s 6.19%. Following on from analysis last week about the fundamental reasons for buying BHP (HERE and HERE), this morning both companies announced director purchases. Taken in isolation these purchases might not seem like much to write home about, but in the context of investment planets aligning they could be significant.
The recent pullback in stocks has created some attractive fundamental plays among the largest resource stocks. Although commodity prices remain in the doldrums and the medium term outlook is bearish, share prices of the stocks below make the expected dividend yields look extremely generous.
For the mining sector the last couple of years have been almost a perfect storm with its biggest customer China having a growth slowdown and strength in the US dollar further crimping demand. Throw in too the lagged impact of new mines commissioned in more bullish times coming on stream the supply/demand balance has been dire. And so shares in the sector have plunged.
John Meyer of SP Angel this morning comments on Anglo Pacific (APF), Anglo American (AAL), Rio Tinto (RIO) and ZincOx Resources (ZOX) as well as offering a detailed macro view on the news that is shaping global mining and the AIM mining pond.
John Meyer of SP Angel this morning comments on Amur Minerals (AMC), Bacanora Minerals (BCN), Central Asia Metals (CAML), Rio Tinto (RIO), SolGold (SOLG), Savannah Resources (SAV) and Xtract Resources (XTR) as well as offering a detailed macro view on the news that is shaping global mining and the AIM mining pond.
Shares in hitherto unloved Savannah Resources (SAV) have bounced strongly now that the AIM-quoted minnow has clinched a mineral sands joint venture with mining giant Rio Tinto in Mozambique. If all goes well, David Archer, Savannah’s chief executive officer, suggests the combined project could eventually be producing ilmenite at the rate of more than 600,000 tonnes a year for a decade at least.
Unfortunately there were some technical issues with this morning’s bullish conference call from Savannah Resources (SAV). Fortunately, I was listening so am able to provide an update. CEO David Archer was in ebullient mood and there is little wonder why. This morning, Savannah surprised the market with news of an exciting joint venture in Mozambique with none other than mining behemoth Rio Tinto (RIO). The joyous response has seen the company’s share price rocket to 3.68p, up 77% on the day. This values the business at £8.37million and the ever-impressive Archer suggested there is more to come in a “very active year ahead”.
EMED Mining(EMED) hopes to produce the first concentrate from its re-launched 203 million-tonne Rio Tinto copper project in Spain during July or August, having raised £64.9 million with a financing package that brings in a substantial new shareholder in the shape of Boston-based Liberty Metals and Mining, part of US insurance giant Liberty Mutual. That is the word from chief executive officer Alberto Lavandeira, who says the project should move into commercial production later on.
John Meyer of SP Angel this morning comments on Acacia Mining (ACA), Avalon Mining (AVI), Cobre Montana, Kefi Minerals (KEFI), North River Resources (NRRP), Rio Tinto (RIO), West African Minerals (WAFM) and Zenyaatta Graphite (ZEN:CAN) as well as offering a detailed macro view on the news that is shaping global mining and the AIM mining pond.
John Meyer of SP Angel this morning comments on BlueRock Diamonds, Caledonia Mining, Centamin, International Ferro Metals, Landore Resources, Rio Tinto and Solgold as well as offering a detailed macro view on the news that is shaping global mining and the AIM mining pond.
John Meyer of SP Angel this morning comments on Coal of Africa, Highland Gold, Sirius Minerals, Solgold, Rio Tinto and the new IPO South32 as well as offering a detailed macro view on the news that is shaping global mining and the AIM mining pond.
When it comes to commodities, much of the focus has been on the drops in the prices of oil and gold, but iron ore has performed even worse. The price of iron has more than halved in the past year, dropping to around $50 per ton and trading close to a ten year low – although it has just put in its biggest gain since October 2012, having risen by 5.9% yesterday to a price of around $54.
Having successfully secured a three-month extension of a $30 million (£20 million) loan facility and convertible loan notes, unloved EMED Mining (EMED) now needs to assemble a financing package of E70 million (£51 million) and E90 million’ to re-launch copper production from Spain’s historic Rio Tinto mine by this autumn. So says Alberto Lavandeiro, AIM-quoted EMED’s chief executive officer, in the wake of an agreement by three key shareholders, lenders and potential customers to extend the loan repayment deadline and the maturity of the convertible by three months to the end of June.
EMED Mining (EMED) updated investors on 23rd February on “rapid progress being made in the development of onsite operations” at its Rio Tinto copper project and that “we remain in advanced discussions with our funding partners and are confident of securing the financing for the re-start of production without delays to the company's anticipated timetable”.
EMED Mining(EMED) is seeking to assemble a financing package worth at least $150 million (£100 million) to restart the historic Rio Tinto copper mine near Seville in Spain after winning final approval for its mining and restoration plan there. The AIM-quoted company is discussing funding alternatives with several groups including its three key backers, the $82 billion Dutch commodity group Trafigura Beheer, US-based Orion Mining Finance and China’s Xianguang Copper, following the favourable decision by the government of the Province of Andalusia
Having earlier in the day announced that a delegation from the regional authorities would be visiting the Rio Tinto mine site, EMED Mining (EMED) yesterday morning announced that during a meeting it has received formal communication of the granting of a mining permit – “the last significant regulatory approvals… before normal mining and processing operations can commence”.
Out-of-favour Savannah Resources(SAV) says there is scope for further exploration at its southern African Jangamo heavy mineral sands project in Mozambique after declaring a maiden resource there of 65 million tonnes in the relatively tentative ‘inferred’ category with 4.2% total heavy minerals. Based in London and quoted on AIM, the company holds 80% of the company operating the Jangamo project, which is next to mining giant Rio Tinto’s major Mutamba deposit, and, says chief executive officer David Archer, ‘will now look to assess a number of promising commercial and strategic options’ for the project.
Having initially requisitioned an EGM to ‘bring about much-needed change’ at EMED Mining (EMED), it has been announced that multinational commodities group Trafigura in conjunction with other cornerstone investors in EMED, Orion Mine Finance and Xiangguang International, has now conditionally agreed a $24 million, and up to $30 million, bridging finance facility with the company in conjunction with Ronnie Beevor, Isaac Querub Caro, Ashwath Mehra and Bob Francis all agreeing to resign from the board, with a new Chairman (Roger Davey) and CEO (Alberto Lavandeira) appointed.
Alberto Lavendeira, new chief executive officer at copper hopeful EMED Mining (EMED), sounds confident the AIM-quoted company will receive permission ‘in the first or second week of January’ to restore copper production at the historic Rio Tinto mine in the Spanish province of Andalusia, after a series of corporate upheavals and the departure of most of the AIM-quoted company’s previous board.
Multinational commodities group Trafigura, the largest shareholder in EMED Mining (EMED), has called an EGM to vote on the removal of most of its board to ‘bring about much-needed change’. Steve Moore and I back Trafigura and urge you to cast proxy votes in support of the calls for change. Small investors, the peasants, can make a difference here and the current board has given the peasants every reason to revolt.
Multinational commodities group Trafigura, largest shareholder in AIM and Toronto-quoted EMED Mining (EMED), has stirred a flurry in the company’s shares by calling for the removal of most of its board to ‘bring about much-needed change’. Having spent some £18 million earlier this year buying an 18% stake in EMED, Trafigura has called for a special investors’ meeting, claiming the present EMED board, under chairman Ronnie Beevor and chief executive officer Isaac Querub, ’is failing to serve the interests of shareholders’ and arguing the company, as currently constituted, lacks the financial resources and management capabilities to achieve its goal of reopening the historic Rio Tinto copper mine in the Spanish province of Andalusia.
EMED Mining (EMED) has announced that it has completed its application for a mining permit for its Rio Tinto copper project and is “confident that it will receive the mining permit before year end”. Together with restoration plan approval (the final plan having gone through public consultation, with approval “expected within the coming weeks”), these are the final permits needed to allow full scale mining operations to recommence.
Over the last five years it has generally been profitable to pick up Rio Tinto (RIO) shares – or RTZ as we old farts still refer to them as - at 3000p and below because as the share price graph shows, this has been the point when the investor risk reward ratio has been more heavily weighted towards reward than risk. Moreover, on a year’s chart the share price seems to be well supported; take a peek.
It has been announced that Trafigura Beheer B.V. has, at 9p per share, acquired a further 30,856,481 shares in EMED Mining (EMED) – taking its interest to 259,029,997 shares (18.04% of EMED). This follows stakebuilding earlier this month and a subsequent placing which then somewhat diluted Trafigura’s percentage interest. It is again stated today that “Trafigura has stated that it has acquired the ordinary shares for investment purposes”.
Having worked to have key permits granted towards the re-starting of production from the Rio Tinto copper project in Spain, EMED Mining (EMED) has announced a €6.80 million net cash outflow in the six months ended 30th June 2014. Together with that negotiations “in respect of an equity financing to support an altered debt and equity structure… have taken considerably longer to conclude than originally anticipated”, this put its balance sheet in a troubling position and has seen it conditionally raise a further £13.1 million at 7.25p per share “to fund its activities up to the end of 2014, and thus enable the company to finalise its plans for the full financing of the Rio Tinto copper project”.
In my last note on Rio Tinto (RIO) in late July, I finished with an observation that the shares looked attractive on a 4% annual dividend yield and an expectation that the company’s cash flow is likely to improve now that its Australian super efficient iron ore estate at Pilbara is about to come fully on stream. This is after some pretty massive capital investment in its infrastructure. I note that there is increasing talk of the company’s cash prospects and a growing preoccupation with what the company is likely to do with such cash, as and when it starts to flow from better operating margins and cuts in the capital expenditure that produced them. One phrase used in a paper of a decidedly pink hew (I speak of its appearance not its politics or life style inclination) that caught my attention was a reference to Pilbara as the “iron ore cash machine”.
Some may question the prospects for copper. Concerns about a Chinese economic slowdown and potential oversupply in 2014 abound. However, these negatives compete with the lowest stock levels in London Metal Exchange warehouses since 2008 and cheerful City forecasts. Isaac Querub and Alberto Lavandeira, respectively newly installed chief executive officer and chief operating officer EMED Mining (EMED), entertain no doubts as they prepare to bring Spain’s historic Rio Tinto copper mine in Andalusia back into production towards the end of next year.
EMED Mining (EMED) has announced results from a “transformational” quarter – in which it received the Unified Environmental Authorisation for the Rio Tinto copper project in Spain , and shortly after was granted ‘Administrative Standing’. So are the shares cheap? Yes.
Mining shares have had a torrid time during the last year with a downward momentum against the FTSE100 index taken on thrust during the last three months. However, just as shares to do not keep going up forever, neither do they for most of their lives keep on going down forever, even if it does sometime feel like that.
There are not too many times when darting and hovering investor is able to by Rio Tinto (RIO) at an historic dividend yield that close to that of the FTSE 100 Index. I note that that the dividend yield on the FTSE 100 index last seen was 3.55% and the historic dividend yield on RTZ was an attractive looking 3.5%. At a share price of 3,176p its ordinary shares are back to levels last seen three years ago and well below the price of above 4,500p it reached in 2011. Clearly a closer look is suggested.
AIM listed EMED (LSE:EMED) has been on the point of starting to build a huge copper mine in Spain for ages. But getting the consents needed seems harder than finding a 17 year old virgin in Romford. And EMED is still not there.