ASX shrugs off Trump tariff legal challenge and Nvidia result
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News.com.au
an hour ago
- News.com.au
The iron ore and steel market moves with the times as Pilbara mines degrade
Aussie iron ore grades have been declining for years Steel mills in China have been adapting to lower grades and higher impurities from Pilbara ores Fastmarkets launches new 61% Fe Index to reflect shifting sands of iron ore and steel market For several years the calling cry of the iron ore market was that grades would need to push higher, products become cleaner and quality control tighter to meet the demands of a Chinese steel sector seeking to reduce the emissions of its heavily polluting industry. In reality the opposite has happened. And the market has shown its inexhaustible adaptability in the face of changes thrust on it by macroeconomic pressures. This week just gone Chinese rebar futures tumbled to an eight-year low amid a property sector bust that has torpedoed the profitability of China's steel mills. Yet Chinese steel production remains on track to settle around the billion tonne mark for a sixth straight year. The response from mill operators has been to use lower grade material that costs less, aided by lower coking coal prices. It also measures up with what the Pilbara's majors have been shipping. Grades from BHP (ASX:BHP) and Rio Tinto's (ASX:RIO) Pilbara mines have been sliding for years. Rio, notably, recently told customers its Pilbara Blend fines would drop from long term grades of 61.6% Fe to 60.8% Fe from July to September this year. BHP downgraded its Mining Area C and Newman High Grade Fines products last year. It reflects a trend that will continue until the majors invest in replacement mines that can arrest the decline, now seemingly baked into their operations, with BHP and RIO regularly reporting price realisations at a discount to the Platts 62% IODEX. In response another price setter, Fastmarkets, has delivered one of the biggest changes to its indices in years, with the launch of a 61% Fe index. Its first trading day on Monday June 2 reported that price a US$92.09/t, below the 62% Fe benchmark of US$93.65/t. In many ways, it will likely give investors, and bean counters at the WA and Federal Governments, a more accurate picture of how much Rio and BHP's iron ore is actually pulling in. "I think there's a lot of interest over the 61% index as it now starts to represent the major mid-grade iron ore segment, especially for Australian ores," Fastmarkets regional managing editor Paul Lim said. "So I think miners and investors all around the world will be looking at the 61% Fe Index as a key barometer of how the Australian mining sector as well as how the Chinese economy is doing as a whole." Both sides of the belt The relationship between Australia's iron ore mines and China's steel market is often described as a conveyor belt which runs over the ocean. So smooth is the network from mine to port in the Pilbara to factory door in Hebei, that it has enabled BHP, Rio, Roy Hill and Fortescue (ASX:FMG) to run at costs that make them the most profitable in the mining sector globally. Even at record prices, gold producers are only now pulling in sales revenues at levels approaching double their cost base. Iron ore miners, on the other hand, receive sales prices that are roughly four times their per tonne cash costs, and that's in a bearish market. With grades slipping from the iron ore majors, Chinese steel mills have adapted to cope, in ways that also help them stem losses caused by weak domestic steel demand. The 61% Fe Index incorporates material that not only has lower Fe grades than the 62% Fe benchmark but also higher impurities – partly a function of grade. Steel mills are becoming more accepting of ore with higher silica and alumina (4.3% and 2.5% for the 61% index vs 4% and 2.3% for the 62% index), adapting their blast furnaces to refined discounted product. "It depends on many factors, right? So, number one, the typical Chinese steelmaker is quite different now from the past, so now China is very skilled at blending ores and even with the weak steel margins they are willing to take on ores with higher impurities," Lim said. Those ores are blended with domestic magnetite concentrates or pellet feed to get specs right in the blast furnace. "The main driver is always profitability, they are looking for economical blends, so they are willing to take ores which are priced lower but have higher contaminant levels," Lim said. "Coal is also cheap so it's easy for them to buy the cheap fuel to just burn through the lower grade iron ores. " This produces a higher amount of slag, but they're OK with this. They will just remove the slag, and there's no need for increased productivity." What does this mean for high grade? Does this mean margin squeeze will squeeze high grade iron ore just as majors complete investments into new sources – Fortescue at its Iron Bridge magnetite project in the Pilbara and Rio/China at the Simandou project in Guinea, West Africa. Maybe not. As Lim stated, China's steelmakers have become adept at blending ores. "The increase in contaminant levels as well as low Fe will have implications for other ores around the world – it will support high grade iron ore prices, it's just at this moment China may not be seeking as much high grade iron ore," he said. " So this change is actually good for high grade producers around the world." Industry participants have made similar comments, with the volume of iron ore suitable for use in lower emissions steelmaking technologies like direct reduced iron restricted by deposit grades and purity specifications. That means most high grade iron ores will have value in blending with low grade ores to reduce emissions in blast furnaces. "The best way to (reduce emissions), if you wanted to have an immediate impact, would be basically just to put cleaner ores in your blast furnaces," Cyclone Metals (ASX:CLE) CEO Paul Berend, whose firm is working with Brazil's Vale to develop the Iron Bear magnetite project in Canada, said. "If you've got cleaner ores, you use less energy, less energy means less pollution, less CO2." With the quality of hematite DSO ores degrading, Berend said WA miners had been slower than international producers like Vale to develop resources with potential to supply higher grade from magnetites.
News.com.au
an hour ago
- News.com.au
Return of the IPO market good news for miners
IPOs have ground to a halt, with no mining listings on the ASX through May But a wave of new explorers and producers are about to hit the bourse Delta Lithium's gold spinout Ballard Mining and Telfer owner Greatland Gold among the high profile names While markets have been volatile in the past few months, a positive sign for the mining market is a pick-up in initial public offerings. Lion Selection Group (ASX:LSX) managing director Hedley Widdup recently pointed out that IPOs were one of the best barometers of the mining cycle because they reliably tracked liquidity. 'When liquidity is poor, it is very hard to achieve an IPO of an exploration company, and likewise when liquidity is freely flowing, investors gobble these up,' he said in Lion's recent quarterly report. In the peak of the market, in 2021, there were 105 mining IPOs. That fell to 64 in 2022, 25 in 2023 and 15 in 2024. There have technically been none yet this year. Canada's Marimaca Copper dual listed on the ASX earlier this year but as it did not raise funds, not a single share has traded in the two months since its debut. Southern Cross Gold Consolidated re-listed on the ASX with a new code after merging with Canada's Mawson Gold. 'In 2025 so far, there have been zero IPOs of resources companies that raised new money to achieve a brand-new listing, which is a litmus test that shows liquidity conditions generally remain subdued,' Widdup said. Test starts today Today, the ASX will welcome its first proper resources IPO this year when Robex Resources debuts. Robex is based in Perth but listed in Toronto and managing director Matt Wilcox recently said poor liquidity on the TSX was behind the move to Australia. The Jim Askew-chaired company, which operates a small mine in Mali and is developing the larger Kiniero mine in Guinea, raised $120 million in its IPO. Meanwhile, new Telfer owner, London-listed Greatland Gold, is pushing ahead with its ASX cross listing which is expected to raise $50 million. Robert Friedland's Ivanhoe Atlantic, developer of the Nimba iron ore project in Guinea, is expected to launch an Australian IPO shortly. CEO Bronwyn Barnes, who also chairs ASX-listed explorer Indiana Resources (ASX:IDA), said Australia was the right place to list Ivanhoe. 'When you're talking about the market that understands iron ore, Australia is a perfect market for this company and for this product, and it also has a very strong familiarity of African projects,' she told the recent AFR Mining Summit. 'But a little bit more broadly than that, at Ivanhoe Atlantic, we've got a bit of a bigger vision about what we'd like to do, not only with the Nimba project, but other projects that we're interested in acquiring. 'And I think being present on the ASX platform gives us opportunities to either acquire or partner with other existing assets or companies on the development of other assets.' AIM-listed Ariana Resources and Toronto-listed Orezone Gold are also progressing Australian dual listings. Right time for Delta Last month, Delta Lithium (ASX:DLI) announced it would spin out its Mt Ida gold project in Western Australia's Goldfields into new company Ballard Mining. Mt Ida has a resource of 10.3 million tonnes at 3.33 grams per tonne gold for 1.1 million ounces of gold. Delta managing director James Croser told Stockhead the company had focused on getting the Mt Ida gold project to a point where it could support a listing, which would allow Delta to countercyclically focus on its lithium projects. 'The gold market timing has lined up nicely as well, and it just seems like the best time for us to set it free,' he said. On Friday, Ballard lodged a prospectus for a $25-30 million IPO, led by Bell Potter Securities and Argonaut. 'The quantum of the raise was a much-discussed number,' Croser said. 'We felt we probably could have got some more, and the market would have delivered on that … the valuation we've put on those 1.1 million ounces that exist there, they're really compelling metrics, and the market will see that, and it has seen that, and a lot of the feedback we've got is that it is extremely well priced. 'That was by design, because you've got to leave something on the table for the new money to enjoy an uplift and you really want to establish that momentum early on in the life of a listing, and we think it's going to run pretty hard and be very successful, and I can't wait to see it happen.' Delta will retain a 46-49% stake in Ballard, depending on the final amount raised. Croser will sit on the board, which also features former De Grey Mining chairman Simon Lill, while Delta chief development officer Paul Brennan will resign to become managing director of Ballard. Former Ramelius Resources (ASX:RMS) and Wildcat Resources (ASX:WC8) chief financial officer Tim Manners will be Ballard's finance director, while Gold Fields' former Australian boss Stuart Mathews will be a non-executive director. Juniors awakening Ballard, which is aiming to hit the board in mid-July, isn't the only explorer on the way to the ASX. Bauxite developer VBX is scheduled to list on the ASX next week after launching a $10 million IPO last month. The company is planning to use the funds to complete a definitive feasibility study on its Wuudagu bauxite project in WA's Kimberley region, which has a resource of 95.9Mt and a reserve of 59.3Mt. VBX also holds the earlier stage Takapinga bauxite project in the Northern Territory. Last week, LinQ Minerals lodged a prospectus for an IPO to raise $7.5-10 million. LinQ is chaired by Clive Donner, a former investment banker and founder of mining private equity fund LinQ Group. The company owns the Gilmore copper-gold project, south of Evolution Mining's Cowal mine in New South Wales. Gilmore has a resource of 1.2 million ounces of gold and 120,000 tonnes of copper. LinQ is aiming to close the IPO on June 20 and list on July 4.
Sydney Morning Herald
an hour ago
- Sydney Morning Herald
Australia-EU trade talks back on amid scramble over Trump tariffs
Salzburg: Australian trade officials will be dispatched to Brussels within days to revive stalled free trade negotiations with the European Union, as escalating global trade tensions – sparked by Donald Trump's return to economic nationalism – inject fresh urgency into finalising the long-delayed pact. Trade Minister Don Farrell confirmed the breakthrough following an hour-long meeting in Paris on Wednesday with EU Trade Commissioner Maros Šefcovic, where both sides agreed to restart formal discussions. 'We've both agreed now that we're going to restart negotiations,' Farrell told this masthead. 'That'll be kicked off in the next day or two, when we send our officials to Brussels [to] see if we can scope out what are the outstanding issues.' The renewed momentum comes as Trump's steep tariff hikes on imports to the US trigger a global scramble among its allies to lock in new or more resilient trade partnerships. The US president has doubled tariffs on steel and aluminium from 25 to 50 per cent, while slapping a blanket 10 per cent tariff on all other imports from Australia. Farrell, who is attending the OECD Ministerial Council Meeting, also met with US Trade Representative Jamieson Greer on the sidelines in Paris to express Australia's 'firm objections' to the new tariffs. Loading 'We've made clear our position to the United States,' he said. 'This is a critical time for stable, rules-based trade.' Prime Minister Anthony Albanese is also set to raise concerns about the tariffs directly with Trump when the two leaders meet for the first time on the sidelines of the G7 summit in Canada in about 10 days. The EU-Australia agreement has been stalled since late 2023, largely due to deadlock over agricultural market access, particularly Australian beef and lamb exports.
