Profits, shares and share prices reported over the past two days by the world’s two major mining companies, BHP and Rio Tinto, have proven the strength of the bull market in commodities.
BHP Group was first removed from the status when it yesterday announced a 17% rise in profits to $ 9.75 billion for the half-year to 31 December, along with a 55% rise in the interim share to $ 1.01.
A 250 BHP iron ore wagon train heading to Port Hedland in Western Australia. Photographer: Ian … [+]
© 2019 Bloomberg Finance LP
Investors rushed to buy a slice of the miner that would generate the lion’s share of its earnings from iron and copper ore, raising the price of its Australian registered shares to a high of A $ 49.32 ($ 38), to comfortable above previous peaks in the success years of 2008 and 2011.
In London, where BHP is also listed, the company has grown to become the most valued asset on the London Stock Exchange, replacing a permanent director, oil giant Royal Dutch Shell.
Silver Bonanza
Rio Tinto took the mining company’s cash bonanza to another level earlier today when it reported a 13% increase in pre-tax profit for the year to December 31 of $ 23.9 billion, matched by a higher share the $ 5.57 and a full-time stock price index of A $ 127.47 ($ 98) on the Australian stock market, up A $ 4.94 on the previous record set in 2008.
Both BHP and Rio Tinto are riding high on Chinese demand for iron ore used to consume steel in that country’s construction-backed construction incentives.
Despite a consistent forecast that iron ore is too late to fall it continues to trade at a rate close to $ 163.30 per tonne, more than double the $ 83 / t at this time last year .
Significantly higher prices for copper are also starting to feed its way into the profits of BHP and Rio Tinto with the price of copper going up an eight-year high of $ 3.84 per pound up 83% on a one-year low last year of $ 2.10 reached in the early days of Covid19 Pandemic.
All right to laugh, BHP chief Mike Henry: Carla Gottgens / Bloomberg.
© 2020 Bloomberg Finance LP
BHP chief executive Mike Henry said yesterday that his company ‘s return on capital had risen by 24% with net debt down 7% at $ 11.8 billion, the lower end of the range set by the board.
“Our outlook for global economic growth and product demand remains positive, with policymakers in key economies demonstrating a sustained commitment to growth and identifying goals to address climate change,” said Henry.
“These factors, combined with population growth and rising livelihoods, are expected to drive continued growth in demand for energy, metals and fertilizers.”
He declined to comment on the speculation that a new “supercycle” had started, and preferred to describe the scene as “very helpful”.
Silenced Critics
Rio Tinto’s relatively new boss, Jakob Stausholm, plagued the company’s critics with a monster share of $ 5.57 a share, up 26% on last year’s total payout of $ 4.43.
The consensus of investment bank projections for an annual split of $ 4.80 with the payment more generous was probably in response to the poor publicity associated with the destruction of Rio Tinto on an old Native American rock shelter in a gorge Juukan near one of his iron mines.
As a result of that incident the company’s chief executive resigned and three senior officers resigned.
Stausholm, in delivering its first profit report said the year was remarkable with a successful response to the pandemic, and a strong safety performance “taken over by the attractive events at the Juukan Gorge, which should not be has never happened. ”