Latest news with #Fortescue
News.com.au
2 hours ago
- Business
- News.com.au
Break it Down: Fortescue commits $3.5M to fast-track Myall JV with Magmatic
Stockhead's Break it Down brings you today's leading market news in under 90 seconds. In this episode, host Tylah Tully looks at news from Magmatic Resources (ASX:MAG), which has locked in a $3.5 million exploration budget with joint venture partner Fortescue (ASX:FMG). The funds will be used at the joint ventured Myall project in New South Wales for drilling across FY25-FY26. Watch the video to learn more. While Magmatic Resources is a Stockhead advertiser, it did not sponsor this content. Originally published as Break it Down: Fortescue commits $3.5M to fast-track Myall JV with Magmatic
West Australian
5 hours ago
- Business
- West Australian
The world's biggest iron ore windfall is fading for Australia, with no clear successor
Flying deep into the heart of Western Australia, Rio Tinto Group executives, politicians and media step off a chartered jet into a Pilbara airport, little more than a sunbaked shed with metal detectors. Cameras roll. Smiles flash. They are here for the unveiling of Rio's Western Range, a new open-cut mine designed to pump out 25 million tonnes of iron ore a year. But behind the fanfare, a harsher truth looms: Western Range isn't about growth. It's about keeping the machine running. In the Pilbara — home to the world's largest iron ore output — Rio Tinto is swapping out old deposits for new just to maintain current production. The powerhouse sector that helped Australia sidestep the 2008 global financial crisis, churned out billionaires, and fed China's skyline ambitions is no longer booming - it's plateauing. Less than two months after the ribbon was cut at Western Range, a more muted signal followed. On Wednesday, Rio Tinto reported its lowest first-half profits in five years after iron ore prices slumped. The result wasn't a collapse, but a reminder that the cracks are widening - and the boom years are getting harder to hang onto. The steelmaking material that underpinned Australia's economic rise is losing its edge: ore quality is falling, margins are tightening, and the vast deposits that built decades of prosperity are slowly being exhausted. None of this will be swift, but the once-reliable resource may not be able to pull Australia through the next financial calamity. And there's not much of a fallback plan. The Pilbara — bigger than California — has fuelled the global iron ore trade since the first shipment set sail for Japan nearly six decades ago. Warnings of an impending slowdown have surfaced before, only for the industry to prove its resilience time and again. But this time, the headwinds are stronger and mining giants are pouring billions into what comes next, as the foundations of the industry begin to shift. 'It's a very significant risk that sits across the Pilbara,' said Greg Lilleyman, a veteran mining executive who served as Fortescue's chief operating officer and spent 26 years at Rio Tinto. 'Customers want higher quality iron ore, lower emissions per tonne of steel, higher productivity from smaller footprints' The lack of any clear successor to iron ore's economic heft is leaving a hole that Australia is unsure how to fill. As the Pilbara's dominance starts to wane, broader pressures are mounting: the re-elected Labor government is rallying top business leaders to tackle stagnant productivity with a budget stuck in deficit. The so-called Lucky Country is being forced to confront the original irony of its nickname: a nation long-cushioned by resource windfalls, now facing the cost of prolonged complacency. As China's hunger for Australian iron ore peaks, Canberra forecasts prices dropping to $US74 a tonne by 2027, around 40 per cent below the average price over the past five years. That spells trouble for the federal budget, with revenue from the sector expected to drop by more than $19 billion in the next two years alone. Furthermore, production volumes are expected to peak within three years. It's a sharp reversal for a sector that Westpac estimates drove more than half of the nation's living standards gains in the first two decades of the century. Without major productivity reform, the bank warns the end of the 'mining dividend' could cost each Australian $75,000 in lost income over the next decade, senior economist Pat Bustamante said in a July report. Not everyone is publicly acknowledging the scale of the challenge. 'Iron ore is the bedrock of Australians' prosperity and the thread which binds us to the global economy,' Madeleine King, Australia's minister for resources, told reporters at the Western Range mine opening in June. The 'project is further proof that Australia's iron ore sector is the best and most stable in the world.' Iron ore still makes up more than 4 per cent of Australia's economy and has long been the backbone of state and federal budgets. But keeping up production and funding exploration is getting harder and more expensive as ore quality declines. At the same time, steelmakers are under pressure to cut emissions, accelerating a pivot toward higher-grade ores that produce less carbon - much of it now coming from new mining hubs outside Australia. In West Africa, Guinea's long-delayed Simandou project, backed by Rio Tinto and Chinese state-linked investors, is finally nearing production, with its first shipment expected by year's end. Home to some of the world's highest-grade untapped iron ore reserves, Simandou spans over 100 kilometres and is projected to produce more than 100 million tons annually at full tilt. Australian media has dubbed Simandou the 'Pilbara killer' - an overstatement, but one that underscores the stakes. Its development reflects Beijing's long-term ambition: to break its dependence on Australian ore and gain greater control over a key input to its steel industry. Chinese state-owned companies are increasingly partnering with global miners, including China Baowu Steel Group Corp., which owns 46 per cent of Western Range. 'We are not just unveiling a new operation, we are celebrating the next chapter' in the Baowu partnership, Jakob Stausholm, outgoing CEO of Rio Tinto, said at the mine's opening, speaking just meters from a building-sized driverless truck dumping piles of ore into a crusher. The speeches were intended to emphasize strength and continuity: ore from the new pit was being piled onto an 18-kilometer conveyor belt that would roll all the way to Rio Tinto's existing Paraburdoo plant. But the plant has now been processing material for half a century - as China diversifies supply and demands cleaner ore, the Pilbara is starting to show its age. For much of this century, iron ore fines with 62 per cent metal from the Pilbara have set the global standard - it's the grade that's priced, traded, and shipped around the world. But that benchmark is now under pressure. As the quality of the material slips into decline, pricing agency Platts is planning to drop the benchmark to 61 per cent from next year - a small shift that signals a bigger challenge to Australia's dominance. High-grade ore is crucial as the world shifts from coal-heavy blast furnaces to cleaner electric-arc technology to cut emissions. Australia wants to lead the green steel race - Prime Minister Anthony Albanese underscored iron ore's role in decarbonization during his visit to Shanghai last month - but most Pilbara deposits fall short of the 67 per cent purity typically required, stuck between 56-62 per cent. Closing that gap will demand investing billions in renewables, hydrogen, and processing - no small task amid weak productivity and tight finances. 'What got us to this point won't get us where we need to go,' Tim Day, head of Western Australia iron ore operations at BHP, said at a June industry event in the Pilbara. 'We are playing in a global game, where the rules are changing radically as we speak.' Australia's mining giants, including global leader BHP, still boast some of the lowest production costs in the world, with hefty margins. But the fundamentals are shifting. Future output may rise in volume, but not in value. It's an even bigger concern given that this revenue stream is expected to bankroll the transition to clean energy, the only long-term strategic bet the mining majors are currently making. With rich deposits of lithium and rare earths, Pilbara miners that built their fortunes on red dirt iron are now redeploying capital into projects aimed at powering the energy transition and meeting soaring demand from data centers and tech industries. But earnings from these ventures remain a fraction of iron ore profits, and the investment risks remain significant. After more than a decade on the sidelines, Rio Tinto is back in dealmaking mode, betting big on the future of battery metals. Its $US6.7 billion acquisition of Arcadium Lithium last year positioned the miner for a bigger role in the global lithium supply chain. The timing, however, isn't ideal - prices remain mired in a downturn, and Rio is currently revising the cost of its Jadar lithium project in Serbia. BHP has also turned to strategic dealmaking to reshape its future. The world's biggest miner launched a bold $US49 billion takeover bid for Anglo American last year, driven largely by a desire to secure more copper, a metal critical to the global electrification push. While the bid ultimately failed, it signalled BHP's intent to pivot more aggressively toward alternative growth-drivers. Despite the growing momentum behind battery metals, China remains firmly in control of the supply chain and is likely to for years to come. Lithium, copper, rare earths and other key inputs to the energy transition currently generate only a fraction of the revenue that iron ore has delivered for decades. Annual iron ore exports were estimated at $116 billion in latest government data, compared with $13 billion for copper shipments and $4.6 billion for lithium. 'Critical minerals are important to Australia's economy, diversified commodity portfolio and Net Zero plan ambitions, but are not a viable alternative for iron ore,' said Caroline Tiddy, a geologist and associate professor at the University of South Australia. Fortescue founder and billionaire Andrew Forrest is one of the industry's loudest advocates for green technology, and has warned the Pilbara risks becoming a 'wasteland' if Australia fails to adapt to shifting global demand. Rio Tinto's incoming CEO Simon Trott, currently head of its iron ore division, remains more sanguine, arguing the region will anchor the economy for generations. The truth likely lies somewhere in between. Meanwhile, external threats to the Pilbara keep mounting. Beyond the challenge of replacing iron ore and coping with declining grades, US President Donald Trump's tariffs are already threatening broader global demand. Rivals like Brazil's Vale are ramping up output and supplying higher-grade ore, intensifying competitive pressure. Simon Trott has his work cut out. As he prepares to take the helm of the world's top iron ore exporter on August 25, he struck a confident tone just days before opening the new Western Range mine. 'Iron ore in the Pilbara will be continuing long after I'm gone - and long after my children's children have gone,' Mr Trott said in an interview. 'The Pilbara will last for many decades to come.' Bloomberg.
The Australian
13 hours ago
- Business
- The Australian
ASX miners slump on Thursday but market's rally extends into July
Weaker than expected earnings from Rio Tinto, troubles travelling to the US and tariffs starting to impact listed businesses, all dragged on the ASX during Thursday's trading. On a mixed day on the market, the benchmark ASX 200 on Thursday fell 13.60 points or 0.16 per cent to close the month of July at 8,742.80. The broader All Ordinaries also slipped down 16.40 points or 0.18 per cent to 8,999.00. Australia's dollar traded 0.26 per cent higher to 64.63 US cents. While the overall market dropped, eight of the 11 sectors traded higher, with gains out of the information technology and consumer discretionary sectors offset by the major miners slumping. The falls followed Rio Tinto announcing its earnings update after trading on Wednesday, informing the market that first half profits came in at their lowest point since 2020, on the back of falling iron ore prices. BHP fell 2.41 per cent to $39.25, Rio Tinto slumped 3.55 per cent to $111.70 and Fortescue slipped 2.31 per cent to $17.77. IG market analyst Tony Sycamore said even with Thursday's wobbles, July's reputation of being a good month for Australian investors continued in 2025. 'As it enters the home straight, it is poised for a 2.35 per cent gain for the month and on track for a fourth straight month of gains made more memorable by its 1580 points (22 per cent) rally from its early April 7169.2 low,' he wrote in an investment note. Consumer discretionary shares jumped after 11.30am after a surprising bounce in retail sales. Shares in JB Hi-Fi were up 1.30 per cent to 411.70, Harvey Norman gained 1.05 per cent to $5.80 and Lovisa Holdings jumped 2.15 per cent to $34.14 on the retail figures. According to the ABS retail sales gained 1.2 per cent for the month of June, its biggest lift since the end of the Covid lockdowns. AMP economist My Bui said June's retail strength, which came off the back of end of financial year sales and the release of the Nintendo Switch 2, might not be a sign of a strong economy. 'In addition, the strong June result has benefited from one-off releases and promotions, which is not necessarily a sign of strength,' she said. Overall though, Australia's market was unable to follow a jump on Wall Street, with the S & P 500 futures up more than 1 per cent on the back of major tech companies beating expectations. Microsoft futures are up 8 per cent and Meta surged 11 per cent as the two tech giants smashed quarterly earnings forecasts. In company news, shares in Flight Centre slumped 7.3 per cent to $11.94 after the business missed its guidance. The travel group said a combination of Middle East tensions, additional costs out of Asia and difficult travel conditions in the US added to the unexpected result. Champion Iron slumped 13.12 per cent to $4.17 after brokers downgraded the miner following a weaker-than expected trading update on Wednesday. Luxury retailer Cettire shares plunged 23.5 per cent to $0.26 after the business said it was accessing the impacts of US President Donald Trump's tariffs on the business. Shipments to the United States represent approximately 40 per cent of Cettire's gross revenue. Read related topics: ASXRio Tinto Business Breaking News End-of-financial-year sales and Australians flocking to one electrical item have triggered an unexpected retail boom. Business Breaking News A key Reserve Bank official has hinted at an August rate cut after welcoming new inflation figures showing the lowest rate since 2021.
News.com.au
21 hours ago
- Business
- News.com.au
ASX200: Major miners slump on worst half year result since 2020
Weaker than expected earnings from Rio Tinto, troubles travelling to the US and tariffs starting to impact listed businesses, all dragged on the ASX during Thursday's trading. On a mixed day on the market, the benchmark ASX 200 on Thursday fell 13.60 points or 0.16 per cent to close the month of July at 8,742.80. The broader All Ordinaries also slipped down 16.40 points or 0.18 per cent to 8,999.00. Australia's dollar traded 0.26 per cent higher to 64.63 US cents. While the overall market dropped, eight of the 11 sectors traded higher, with gains out of the information technology and consumer discretionary sectors offset by the major miners slumping. The falls followed Rio Tinto announcing its earnings update after trading on Wednesday, informing the market that first half profits came in at their lowest point since 2020, on the back of falling iron ore prices. BHP fell 2.41 per cent to $39.25, Rio Tinto slumped 3.55 per cent to $111.70 and Fortescue slipped 2.31 per cent to $17.77. IG market analyst Tony Sycamore said even with Thursday's wobbles, July's reputation of being a good month for Australian investors continued in 2025. 'As it enters the home straight, it is poised for a 2.35 per cent gain for the month and on track for a fourth straight month of gains made more memorable by its 1580 points (22 per cent) rally from its early April 7169.2 low,' he wrote in an investment note. Consumer discretionary shares jumped after 11.30am after a surprising bounce in retail sales. Shares in JB Hi-Fi were up 1.30 per cent to 411.70, Harvey Norman gained 1.05 per cent to $5.80 and Lovisa Holdings jumped 2.15 per cent to $34.14 on the retail figures. According to the ABS retail sales gained 1.2 per cent for the month of June, its biggest lift since the end of the Covid lockdowns. AMP economist My Bui said June's retail strength, which came off the back of end of financial year sales and the release of the Nintendo Switch 2, might not be a sign of a strong economy. 'In addition, the strong June result has benefited from one-off releases and promotions, which is not necessarily a sign of strength,' she said. Overall though, Australia's market was unable to follow a jump on Wall Street, with the S & P 500 futures up more than 1 per cent on the back of major tech companies beating expectations. Microsoft futures are up 8 per cent and Meta surged 11 per cent as the two tech giants smashed quarterly earnings forecasts. In company news, shares in Flight Centre slumped 7.3 per cent to $11.94 after the business missed its guidance. The travel group said a combination of Middle East tensions, additional costs out of Asia and difficult travel conditions in the US added to the unexpected result. Champion Iron slumped 13.12 per cent to $4.17 after brokers downgraded the miner following a weaker-than expected trading update on Wednesday. Luxury retailer Cettire shares plunged 23.5 per cent to $0.26 after the business said it was accessing the impacts of US President Donald Trump's tariffs on the business. Shipments to the United States represent approximately 40 per cent of Cettire's gross revenue.
Yahoo
2 days ago
- Business
- Yahoo
Renewable electricity adoption within mining
Mining is an energy-intensive process, and its need for consistent power has historically led to the use of fossil fuel generators. However, looming emission reduction targets, combined with the increasing cost competitiveness of renewables, and the rising adoption of electrification across mining operations and activities, have driven a growth in renewable electricity adoption among miners in recent years. Many miners have made significant progress in transitioning to renewable energy sources over the past five years, with various companies setting near-term renewable energy targets, such as Vale's goal to reach 100% renewable energy use worldwide by 2030. This change has partly been driven by the decreasing cost of renewable energy installations and energy storage solutions. This trend has also been further fueled by corporate commitments to reduce emissions, often focusing on cuts in Scope 1 and 2 emissions, influenced by increased public scrutiny towards heavy-emitting sectors. For example, industry players, such as Fortescue and Rio Tinto, have established bold near-term climate targets. Fortescue aims for 'real zero' by 2030 across its iron ore operations, while Rio Tinto targets a 50% reduction in Scope 1 and 2 emissions by 2030. What key methods are being utilised by miners to increase renewable electricity adoption? Miners are increasing their use of electricity generated from renewable energy through two main methods. First, for mines located near existing grids, this shift is supported by power purchase agreements (PPAs). Second, for remote mines with limited or no grid access, the transition to renewable energy is driven by the development of on-site renewable power plants. According to GlobalData, there are currently 886 active and upcoming off-grid mines that will require on-site renewable capacity to decarbonise their electricity supply. Power purchase agreements: a key strategy for reducing scope 2 emissions Top ten mining companies by share of renewable electricity used within operations in 2024 In 2024, Antofagasta reported the highest percentage of renewable electricity used in its operations, at 100%. Since 2022, the company has reported that all of its power supply contracts for its mining operations are for electricity from renewable sources. Notably, in 2020, the company announced that its Centinela mine had signed a PPA with Engie Energia Chile for 100% of the power supplied to be from renewable sources, effective from 2022 until 2033. Due to its PPA activity, Antofagasta has achieved its initial interim emissions reduction target of cutting Scope 1 and 2 emissions by 30% by 2025. Meanwhile, Lundin Mining saw the most significant increase in the share of renewable electricity used within its operations between 2023 and 2024 (from 74% to 81%). In 2024, one of the company's open-pit mines, Chapada, finalised a strategic agreement with Serena, a clean energy investor, to supply 100% renewable energy to its operations. Separately, its Candelaria mine announced the extension of its contractual agreement to source 100% of its electricity from renewable sources in 2024. The agreement will see four of Lundin's six operational mines operate entirely on 100% renewable purchased electricity. The examples highlight the role of PPAs in facilitating the decarbonization of mining operations, with long-term contracts fixing electricity prices, ensuring cost savings in both the near and long term. Unilateral industry progress is a dream rather than a reality However, some miners continue to lag. In 2024, of the companies that recorded renewable electricity consumption, Solidcore Resources (formerly Polymetal International) and Barrick Mining Corp. registered the lowest percentages, at 1% and 7%, respectively. Barrick Mining experienced the most significant decline in its renewable electricity share from 2023 to 2024, dropping from 25% to 7%. Despite the company investing over $775m in low-carbon infrastructure, the restart of operations at Porgera and the ramp-up of activities at Pueblo Viejo have led to an increased reliance on fossil fuels in 2024. Comparatively, Solidcore noted that the challenges of procuring clean electricity from grid suppliers led to a decline in renewable electricity consumption in 2023. The company has set a target to reach 30% renewable electricity in its energy mix by 2030. To meet its target, the company has placed greater importance on developing its own renewable energy capacity. To that end, Solidcore announced construction would begin in 2025 for a 23MW solar power plant at its Varvara mine in Kazakhstan. Capital constraints are impacting industry progress in on-site generation Off-grid mines face the capital-intensive challenge of establishing renewable energy systems and transitioning existing operations. Despite this, an increasing number of miners are developing renewable power plants. Vale, for example, has invested heavily in the development of its renewable portfolio, which accounts for 97.8% of total generation. In 2024, the company held 3.3GW of installed renewable capacity worldwide, with its most notable project being the Sol do Cerrado solar project in Brazil, which reached its full installed capacity of 766MW in 2023. Due to its investments in on-site renewable power plants, Vale achieved 100% renewable electricity consumption in its Brazilian operations in 2023, two years ahead of its target. However, renewable intermittency still presents a significant challenge, with generation varying with local conditions. In regions with low solar irradiance and wind speeds, remote mines may struggle to transition to on-site renewable power plants. Regardless of the mine location, utility-scale energy storage will be key to ensuring a stable electricity supply for operations. However, developing co-located energy storage capacity presents an additional cost barrier to transitioning to renewable electricity. Due to the price volatility of many critical minerals, many miners are opting to reduce capital-intensive investments, instead prioritising short-term survivability over long-term sustainability. This is one of several challenges miners face in adapting to the evolving industry landscape. Simultaneously, as decarbonisation becomes a critical issue across various sectors, the demand for critical minerals will increase substantially, placing pressure on miners to expand their production. Without sufficient renewable capacity and energy storage systems in place, miners may struggle to meet this demand while maintaining the share of renewable energy in their electricity mixes. The rise of electrification in mining, underlined by the growing number of electric vehicles at mine sites, will further intensify the industry's electricity demands. According to GlobalData, there are currently 958 pieces of electric equipment in use at mines worldwide, as of April 2025. Battery mining trucks account for the largest proportion, with 386 currently in operation. While the adoption of electric vehicles creates opportunities for clean electricity, sufficient capacity through PPAs or on-site installations will need to be put in place for miners to continue increasing their renewable electricity share. The future of renewable electricity within mining Ultimately, the mining industry is a vital part of the energy transition, and miners are fully aware of this. Using electricity from renewable sources can be more challenging due to the location of some mines, the variability of renewable power, and the costs of expanding renewable capacity to support electrification. However, although transitioning mines require significant investment, the decreasing project costs of renewable energy have made it easier for miners to increase their use of renewable electricity, especially in off-grid mines. In addition, adopting modular BESS systems can help minimise the impact of renewable intermittency on power supply. Meanwhile, PPAs will continue to be a key vehicle for scaling the renewable electricity share of on-grid mines, providing vital stability through long-term, fixed-price contracts. "Renewable electricity adoption within mining" was originally created and published by Power Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. 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