daverob82
02 Mar 2018
Re: Trump tarrif In theory it should push up the prices in the US and reduce prices elsewhere. That is if it goes ahead... is supporting the domestic steel industry worth doing at the expense of higher resource costs for manufacturers?
vekta
02 Mar 2018
Trump tarrif With US tarrif on aluminium + iron shouldn't it push the shares up in stead of fall back?
picstloup
21 Feb 2018
There goes £40 Last seen in about 2011. Very glad I topped up at £16.70 in Jan 2016. No plans to topslice at the moment.
Lupo di mare
16 Feb 2018
Mongolian hiccup LONDON (Alliance News) - Rio Tinto PLC said Friday it is looking to find a domestic power solution for its Mongolian mine after the government cancelled a previous agreement.The FTSE 100-listed mining giant said the government of Mongolia has cancelled the Southern Region Power Sector Cooperation Agreement.The PSCA was a cooperation framework between the Mongolian Government and Oyu Tolgoi to deliver a "comprehensive energy plan for the South Gobi region." The primary intention of this was to develop a new independent power plant at the Tavan Tolgoi coalfields. Under this arrangement, Oyu Tolgoi would be an off-taker rather than owner."The decision to terminate the PSCA indicates that the Government of Mongolia no longer views the Tavan Tolgoi Power Project as a viable option for Oyu Tolgoi," Rio Tinto said in a statement."As a result, and in line with the terms of the 2009 Investment Agreement, Oyu Tolgoi is now obliged to deliver a domestic power source for the operation within four years."Rio Tinto explained it was working with its partners Oyu Tolgoi and Canada-listed Turquoise Hill to fulfil its commitments under the investment agreement with the Mongolian government.The partners are evaluating "all viable power" options which include the construction of an on-site power plant. Any costs and means of financing this will be finalised between shareholders, Rio added.Rio Tinto said it has already earmarked USD250 million a year for the development of a power station in Mongolia in its 2019 and 2020 capital expenditure forecasts. It will, however, continue to review capex forecasts.Rio Tinto owns a 51% stake in Turquoise Hill which, in turn, own 66% of the Oyu Tolgoi project.In late January, Rio Tinto Chief Executive Officer Jean-Sebastien Jacques met with Mongolian Prime Minister Ukhnaagiin Khurelsukh and other government officials to strengthen its partnership regarding the Oyu Tolgoi project in the country by setting up a joint working group. As part of this they intended to look at an accelerated path of development for a power solution in Mongolia.
Hydrogen Economy
15 Feb 2018
Slicing profit Taken a slice of profit here. Price moved up strongly today in the general recovery and I think there may be more to come, but can't help thinking that we are getting pretty close to fully valued and near to 5+ year highs. Its just reward for holding through the dark days. The 4Traders and Digital Look forecasts for EPS are all showing decline from here on. Of course if the scenario of quality iron ore driving prices significantly higher plays out then those numbers are likely to get revised up and Fx could change the picture. Still holding ~2% and a few BLT. Lightening up on remaining BLT is next on the agenda if miners continue the rise. 4T EPS2017 350p2018 332p2019 303p2020 290pH2
BubblingUp
07 Feb 2018
Prospective yield of 5.2% From HL - [link] ViewRio might technically be a diversified miner, but iron ore is really what it's all about.It accounts for almost 60% of group EBITDA (earnings before interest, tax, depreciation and amortization) and with production costs at the flagship Pilbara mines as low as $13.4 a tonne, Rio's cost of production is incredibly low. Prices are up 20% on last year to $64.10 a tonne. The ore doesn't cost any more to dig up, so every cent of that price growth is profit.Of course that sensitivity to commodity prices is a curse as well as a blessing. When prices collapsed in 2015/16 Rio was forced to embark on a brutal cost cutting exercise. The situation wasn't helped by the mountain of debt on the balance sheet.Following a root and branch review, most of the group's coal assets have been let go. Rio is now firmly focused on industrial metals (plus a smaller diamonds business) and is investing in future capacity to safeguard long term earnings.With debts now firmly back in hand, and expenses significantly reduced, Rio is in a position to pass the benefits of higher commodity prices back to shareholders. When times are good the mining mega groups are cash machines, and 2017's heady mix of dividends and buybacks are proof of how rewarding that can be.The move towards a 'percentage of earnings' type dividend policy is sensible, since it helps keep the balance sheet healthy over the long term. However dividends will be volatile as commodity prices shift.The shares currently offer a prospective yield of 5.2%.
II Editor
07 Feb 2018
NEW ARTICLE: Keep your cool during volatility spike "Rising US Treasury yields were just the excuse money men needed to bank massive profits made since Donald Trump's election victory. However, just as markets cannot keep rising forever, they must also stop falling at some point, but it's still ..."[link]
II Editor
07 Feb 2018
NEW ARTICLE: Dividend boom at Rio Tinto "What a difference a couple of years has made at LSE:RIO:Rio Tinto. Back in February 2016, the previous management team frustrated investors by ending the Anglo-Australian company's progressive dividend policy, arguing that it was not appropriate ..."[link]
Lupo di mare
07 Feb 2018
Summary Personally, I liked the reduction in net debt. I know it's the in-thing to have so-called 'efficient balance sheets', but they're cr ap in any downturn, and irresponsible IMHO."LONDON (Alliance News) - Anglo-Australian miner Rio Tinto PLC significantly increased cash flow from operations and reduced net debt in 2017, both above analyst expectations, allowing it on Wednesday to further increase returns to shareholders including a record dividend.Net cash generation from the blue-chip miner's operating activities rose 64% year-on-year to USD13.88 billion from USD8.47 billion, ahead of analyst consensus of USD13.73 billion.Rio Tinto reduced its net debt to USD3.85 billion, well down on the USD9.59 billion at the end of December 2016, and likewise below consensus of USD4.89 billion. The company's net gearing ration has fallen to 7% from 17% in 2016.Looking ahead, Rio Tinto expects additional cumulative free cash flow of USD5.0 billion from 2017 to the end of 2021 due to productivity improvements, including GBP300.0 million in 2018. It is targeting an annual exit rate from mine to market productivity improvements of around USD1.5 billion from 2021.Rio Tinto will pay a total dividend of 290 US cents per share for 2017, including a final dividend of 180 cents. This figure compares to a total dividend for 2016 of 170 cents, with analyst consensus expecting a payout of 275 cents.Alongside the record dividend, the company has declared a further USD1.0 billion share buyback programme, to be completed by the end of 2018, having this time last year surprised the market with a similar announcement. It returned USD4.0 billion via share buybacks in 2017.This is the second year in a row in which Rio Tinto has delivered welcome news to the market regarding shareholder returns. Twelve months ago, its 170 cents total dividend was down 21% on 2015 but well above a 110 cents commitment and analyst expectations of a 113 cents payout.Alongside the bigger-than-expected dividend payout at the end of 2016, the market was pleasantly surprised by the announcement of a USD500.0 million share buyback over the course of 2017.Rio Tinto followed this up in September last year by adding a further USD2.50 billion to the buyback, bringing total buybacks for 2017 to USD4.00 billion after similar announcements in February and August.Rio Tinto completed the February and August buybacks totalling USD1.50 billion in December, and announced a further USD1.93 billion on-market buyback to be completed by the end of 2018.Analysts at Deutsche Bank said towards the end of January given its attractive cash flow, as well as the divestment of assets, the company should have been able to continue to pay-out significantly to shareholders, which Rio Tinto has done.During 2017, Rio Tinto completed USD2.7 billion worth of divestments, including September's USD2.69 billion sale of its Coal & Allied Industries Ltd business to Yancoal Australia Ltd. Post year-end, the company announced a USD500.0 million offer for its Aluminium Dunkerque smelter in France from Liberty House.The returns to shareholders come as Rio Tinto posted a 69% increase in underlying earnings for 2017 at USD8.63 billion compared to 2016's USD5.10 billion and narrowly ahead of market consensus of USD8.58 billion. Underlying earnings were boosted by USD4.1 billion post-tax due to higher commodity prices.Rio Tinto's net profit totaled USD8.76 billion in 2017, almost double from 2016's USD4.62 billion net profit, due to disposals.Revenue was USD40.00 billion in 2017 compared to USD33.80 billion in 2016, slightly down from consensus of USD41.55 billion. This, the company said, was primarily due to higher commodity prices through the year.The Platts price for 62% iron Pilbara fines was 20% higher on average than 2016, Rio Tinto said. Realised hard coking coal prices were 42% higher on average year-on-year, while realised thermal coal prices were 32% high
picstloup
07 Feb 2018
Profits up 90% Divi up 71%. Very nice. No plans to sell.
II Editor
31 Jan 2018
NEW ARTICLE: 10 quality income stocks for risk averse investors "The past 12 months have offered mixed fortunes for income investors. On the upside, 2017 was a record year for dividend payouts. In total, £94.4 billion found its way back to investors with the help of special dividends and much improved payouts ..."[link]
Lupo di mare
23 Jan 2018
Visit to Mongolio And trouble at mill."LONDON (Alliance News) - Rio Tinto PLC said Tuesday that Chief Executive Officer Jean-Sebastien Jacques met with Mongolian Prime Minister Ukhnaagiin Khurelsukh and other government officials to strengthen its partnership regarding the Oyu Tolgoi project in the country.The FTSE 100 miner said the talks in the Mongolian capital Ulaanbaatar saw the company and government discuss ways to strengthen the relationship by "setting up a joint working group".The working group would explore whether funding costs can be reduce to improve benefits from the Oyu Tolgoi projects. It also would look at an accelerated path of development for a power solution in Mongolia and an acceleration of the strategy at Oyu Tolgoi to invest in nearby town Khanbogd for sustainable community development."Rio Tinto remains fully committed to Oyu Tolgoi and Mongolia," Jacques said. "Our nearly 14,000 employees and the people of Mongolia should be proud that Oyu Tolgoi is one of Rio Tinto's safest and most productive mining businesses in the world. We remain committed to creating opportunities for talented Mongolians to build their careers on a global stage.""We want to work with the government of Mongolia to create long-term sustainable solutions that benefit all stakeholders and the country while staying true to the established investment frameworks," Jacques added."We will continue to work together to solve outstanding issues as the joint working group progresses win-win solutions on matters such as power and community development," Jacques concluded.On Friday, Canada-listed Turquoise Hill - which is 51% owned by Rio Tinto - declared force majeure at Oyu Tolgoi after a protest by Chinese coal workers which resulted in an obstruction of a road to China saw it unable to deliver concentrates to customers.Turquoise Hill owns 66% of the project, with the Mongolian government owning the balance.Rio Tinto emphasised at the time that normal mine operations at Oyu Tolgoi were maintained and production was unaffected. It made no further comment on the situation on Tuesday. "
Rhigos
16 Jan 2018
Re: Results, trading update due out toda... cakeslicer, "I believe it is out 8.30am Sydney time which is 9.30pm tonight."Thanks cakeslicer that explains delay.
Rhigos
16 Jan 2018
Trading update In line with guidance basically. Not great figures but the only bad bit, which will have already been in SP, was following:"Mined copper production of 478.1 thousand tonnes was nine per cent lower than 2016 due primarily to the impact of a 43 day strike at Escondida in the first quarter. Production was in line with revised guidance."I did hear on Bloomberg TV this morning that iron ore prices are likely to fall in 2018. The story was that some of China's iron ore mines were shut down for the winter to reduce pollution. It is anticipated that they will start up again in the spring reducing demand for iron ore imports. They are also shutting down their old, polluting, steel mills, which will remove some overcapacity and again reduce demand for iron ore. [link]
trueblog
15 Jan 2018
Re: back of an envelope Sorry, I haven't looked into BHP in as much detail, but my analysis of RIO was just based on the publicly available data, nothing proprietary.I think that the only chance a PI has of riding the market is to conduct a level headed analysis of the value of a companies business model, take into account the trends that the commentators are talking about, and avoid the short term herd mentality of brokers who are just thinking of the next 5 minutes and who are afraid to divert from the group think as it makes them vulnerable.Warren Buffet famously says that he only invests in companies that he understands, and that have a moat around their product.Well the big IO miners have a pretty simple business model IMO, and while they are presently price takers rather than makers, having the lowest production cost is some sort of moat. What is interesting is to ponder whether the Chinese environmental push shifts the power balance in favour of the big 3 miners. If the attractiveness of the low grade marginal producers has been damaged by the Chinese restrictions, then the market could be much more on edge than previously imagined, and in this scenario, the big 3 have a real monopoly between them, much more so than OPEC at its height. In addition for heavy infrastructure there isn't any alternative material on the horizon (aluminium bridges anyone?) Listen to Robert Rennie explain how the apparent glut of steel is actually not what it seems, much of the increase is simply the replacement of illegal low quality product that was never counted, by more legitimate supplies.Al very much IMO and please DYOR.
