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Freeport-McMoRan Inc. FCX is set to release fourth-quarter 2023 results before the opening bell on Jan 24.The mining giant’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, while missed once. It has a trailing four-quarter earnings surprise of roughly 21.9%, on average. Freeport is expected to have gained from its efforts to increase mining rates, the strength in copper prices and lower costs in the fourth quarter.The stock has lost 15.9% in the past year compared with the industry’s 10.8% decline.

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Let’s see how things are shaping up for this announcement.

What do the Estimates Indicate?

For the fourth quarter of 2023, Freeport expects sales volumes to be 1.1 billion pounds of copper, 580,000 ounces of gold and 20 million pounds of molybdenum.The Zacks Consensus Estimate for Freeport’s fourth-quarter consolidated revenues is currently pegged at $5,844.3 million, which suggests a year-over-year increase of 1.5%.

A Few Factors to Watch

Freeport is likely to have benefited from improved costs in the fourth quarter. It is seeing improving trends for several of its commodity-based input costs and remains focused on managing costs and improve productivity. Our estimate for fourth-quarter consolidated net cash costs per pound of copper currently stands at $1.58, which indicates a sequential decrease of 8.7%.Moreover, continued strong performance at PT Freeport Indonesia and efforts to increase operating rates at Cerro Verde and El Abra mines are likely to have aided the company’s copper volumes in the quarter to be reported. FCX is expected to have witnessed improved volumes in its Grasberg operations in the December quarter on higher mining rates and ore grades. The company is also likely to have benefited from higher milling rates in South America. Our estimate for consolidated copper sales for the fourth quarter is 1,085 million pounds.Freeport’s fourth-quarter results are also expected to have been supported by the strength in copper prices. Copper prices had started 2023 on a strong note, fueled by investor expectations of a surge in demand after the reopening of the China economy from COVID-led restrictions. However, softer demand from China and global economic concerns weighed on copper prices during the second quarter.Copper started the third quarter on a positive note amid expectations that demand in China will improve, backed by stimulus measures from the government, but closed the quarter lower on worries over China’s real estate sector. However, prices of the red metal moved higher in the fourth quarter and hit a three-month high in early December on supply disruptions (partly due to the Panama copper mine closure), better-than-expected data from China, a weaker dollar and prospects of interest rate cuts. Copper maintained the momentum through December and ended the year on a high note amid concerns over supply constraints.

Freeport-McMoRan Inc. Price and EPS Surprise

Freeport-McMoRan Inc. price-eps-surprise | Freeport-McMoRan Inc. Quote

Zacks Model

Our proven model does not conclusively predict an earnings beat for Freeport this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.Earnings ESP: Earnings ESP for Freeport is -8.72%. The Zacks Consensus Estimate for earnings for the fourth quarter is currently pegged at 23 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Zacks Rank: Freeport currently carries a Zacks Rank #3.

Stocks That Warrant a Look

Here are some companies in the basic materials space you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:Carpenter Technology Corporation CRS, scheduled to release earnings on Jan 25, has an Earnings ESP of +0.89% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.The consensus estimate for CRS’s earnings for the fiscal second quarter is currently pegged at 85 cents.Barrick Gold Corporation GOLD, slated to release earnings on Feb 14, has an Earnings ESP of +3.99% and carries a Zacks Rank #3 at present.The consensus mark for GOLD’s fourth-quarter earnings is currently pegged at 23 cents.Kinross Gold Corporation KGC, scheduled to release fourth-quarter earnings on Feb 14, has an Earnings ESP of +25.00%.The Zacks Consensus Estimate for Kinross' earnings for the fourth quarter is currently pegged at 9 cents. KGC currently carries a Zacks Rank #3.Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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(Bloomberg) — BHP Group Ltd. is considering options for its Australian nickel operation to mitigate the impact of a sharp fall in prices and warned it could be forced to write down the value of the assets, the latest sign of trouble in the green metals sector.

Most Read from Bloomberg

The world’s largest miner said it was assessing market conditions for the key battery material and will update investors next month, along with half-year results.

“The nickel industry is undergoing a number of structural changes and is at a cyclical low in realized pricing,” BHP said in Thursday’s statement. “Nickel West is not immune to these challenges.”

Nickel prices dropped 45% last year, weighed down by a flood of cheap supply from Indonesia, where new techniques to produce battery-grade material are threatening to disrupt the industry. BHP’s warning adds to a string of similar announcements from other companies, as smaller miners struggle to raise money from more traditional sources and grapple with rising costs.

Earlier this week, First Quantum Minerals Ltd. said it would halt mining at its nickel and cobalt operation in Western Australia and cut a third of the workforce in response to weaker metal prices and higher costs. The metal is used to make stainless steel and EV batteries.

Read More: Battery Metal Price Plunge Is Closing Mines and Killing Deals

BHP produced 19,600 tons of nickel in the final three months of 2023, up 11% from the year before, it said in Thursday’s statement. The company’s Nickel West operations include three mines, a smelter in Kalgoorlie, its Kwinana refinery and a sulphate plant.

Under Chief Executive Officer Mike Henry, BHP has reshaped its portfolio by exiting oil and gas, selling coal assets and completing the $6 billion takeover of OZ Minerals Ltd. to add more exposure to copper. Demand for that metal is forecast to surge as the world decarbonizes due to its use in power grids and electric vehicles.

A potential writedown of Nickel West would not be overly material to BHP as the metal forms a “a very small part of their overall business portfolio,” Barrenjoey resources analyst Glyn Lawcock said in a phone interview.

“By nature we’re in a cyclical industry — today, it feels like nickel’s not the place I want to have money tied up and invested in,” said Lawcock, who added that the massive surplus of Indonesian supply had caught the market by surprise.

Mainstay Product

Even as Henry shifts focus to energy-transition materials, iron ore remains BHP’s mainstay product. The company’s output of the steelmaking material in the three-month period was 65.8 million tons, down 2% from the year before.

Chinese demand for steel has plateaued and production is on track to peak before the end of the decade, dented by a years-long crisis in the nation’s property sector, which has typically consumed more than a third of the country’s steel output. While there’s some growth in smaller segments like manufacturing of electric cars and air conditioners, the pace of construction has slowed, meaning the nation’s iron ore imports are forecast to decline.

Earlier this week, BHP’s rival Rio Tinto Group reported output of iron ore for the three months to Dec. 31 fell 2% to 87.5 million tons.

Meanwhile, BHP’s copper production rose 3% in the three months, while metallurgical coal slumped 18%. Production guidance ranges for the fiscal year remained unchanged for all assets, with the exception of coking coal which was lowered. In October, BHP agreed to sell two Australian coking coal operations to Whitehaven Coal Ltd. for at least $3.2 billion.

Operations at BHP’s Saraji coking coal mine were suspended on Jan. 15 after a worker fatality and are expected to progressively restart over the coming days, it said Thursday.

BHP’s shares in Sydney fell as much as 2.2% before trading 1.3% lower to A$45.985 apiece at 1:20 p.m. local time on Thursday.

(Updates with Nickel West project details in 6th paragraph, analyst comments in 8th)

Most Read from Bloomberg Businessweek

BHP to offer more detail on nickel unit at earnings on Feb 20

Western Australia iron ore output eases 2.2%, meets forecasts

Quarterly copper output falls 4%

(Rewrites throughout, adds detail on nickel operations, copper production)

By Melanie Burton

MELBOURNE, Jan 18 (Reuters) – BHP Group said on Thursday it was reassessing the value of its nickel operations after a price slump, in a move that could lead to writedowns amid an oversupply of the metal used in electric vehicle batteries.

The world's biggest listed miner, which signed a deal to supply nickel to Tesla in 2021, is reevaluating the business after prices fell 40% in the last year as Indonesian supply jumped, causing restructures and writedowns at nickel mines across Australia.

BHP said it was looking at options to mitigate the impacts of the sharp fall in nickel prices and that it would offer more details at its half-year results on Feb. 20.

"The nickel industry is undergoing a number of structural changes and is at a cyclical low in realised pricing," it said in quarterly production report. "Nickel West is not immune to these challenges….Given the market conditions, a carrying value assessment of the Group's nickel assets is ongoing."

BHP may write down the value of the West Musgrave nickel project it acquired with its purchase of OZ Minerals last year that experts valued at $1.2 billion, analysts said. The mine, currently under development, could also be delayed.

BHP could put its Nickel West unit that include its Kwinana plant that produces nickel sulphate under strategic review for a possible sale, although this was seen by analysts as less likely, or choose to delay planned investment.

Earnings tanked at BHP's nickel business in the 2023 financial year, sliding 61% from a year earlier to just $164 million. The division accounts for less than 1% of its earnings but is a major part of its green energy marketing strategy.

BHP failed to sell the division about a decade ago due to an estimated $1 billion in closure costs at the time.

Elsewhere, BHP reported a small 2.2% drop in second-quarter iron ore production that was in line with analyst forecasts as it ties in its rail line to a central production hub in the Pilbara region.

Iron ore production from Western Australia on a 100% basis was 72.7 million metric tons (Mt) in the three months to Dec. 31, down from 74.3 Mt reported a year ago.

That compares with a Visible Alpha consensus estimate of 72.5 Mt, according to Morgan Stanley.

BHP said it was working with authorities after a worker at its BHP Mitsubishi Alliance (BMA) coal business was fatally injured in a vehicle incident on Jan. 15.

BHP logged a 4% drop in quarterly copper production to 457,000 metric tons due mostly to lower concentrator grades at its Escondida mine in Chile.

(Reporting by Melanie Burton in Melbourne and Himanshi Akhand and Echha Jain in Bengaluru; Editing by Maju Samuel and Jamie Freed)

By Melanie Burton

MELBOURNE (Reuters) – Australian nickel producers, hit by a sharp jump in supply from rival Indonesia, are starting to buckle under low prices that analysts expect will force a rethink by top global miner BHP Group on its nickel strategy this year.

The metal has long been feted as a key battery material for electric vehicles because it improves energy density so cars can run further on a single charge.

BHP has promoted nickel as core to its green strategy. It signed a deal to supply Australian nickel to Tesla in 2021, touting the country's rich geology and strong financial and environmental regulations.

But Australia's producers have been squeezed by Indonesia's emergence as a supply powerhouse and on the demand side by innovations away from using nickel in batteries, which have led to a 40% price slump over the past year to around $16,000 a ton.

"The challenges facing many nickel producers are unlikely to ease near term. We are bearish on the commodity and quite cautious on assets and producers," said UBS analyst Lachlan Shaw.

Lithium iron phosphate (LFP), which does not use nickel, has been gaining ground as the EV battery chemistry of choice, especially in China, because LFP batteries can be produced more cheaply, making EVs more affordable.

However, BHP has placed a big bet that nickel sulphide deposits in low-risk jurisdictions will attract a premium because they use less energy to extract nickel than laterite deposits found in Indonesia.

It is not alone.

Wyloo Metals, which last year bought nickel miner Mincor for $504 million, still believes in the long-term fundamentals for Australian nickel, said CEO Luca Giacovazzi.

"The industry needs a more appropriate and transparent pricing mechanism, that distinguishes between clean and dirty nickel, so consumers can be confident their EV really is a better choice for the environment," Wyloo's Giacovazzi told Reuters.

But for now, weak prices have forced Australia's high cost producers to announce a swathe of writedowns and restructures, with Canada's First Quantum the latest to cut production.

SHELVING PROJECTS?

Earnings tanked at BHP's nickel business in the 2023 financial year, sliding 61% from a year earlier to just $164 million. The division accounts for less than 1% of its earnings.

"We are working hard to remain globally competitive in a very tough operating environment. Costs have risen sharply and continue to go up while prices have fallen as new supply comes into the market," said BHP Nickel West Asset President Jessica Farrell.

She said the company is working to "take action to address these challenges", without elaborating.

At its Western Australian nickel operations, BHP is assessing options for a major smelter renewal and a mine expansion while it sets out to build the West Musgrave mine that it acquired with its $6.4 billion takeover of Oz Minerals.

One option for BHP could be for it to delay West Musgrave until the market recovers, said Barrenjoey analyst Glyn Lawcock.

"Clearly right now nickel is challenged," he said. "(But) I think to write nickel off today for forever is a big call."

Even with the growing use of LFP batteries, they won't capture 100% of the market. As consumers go for cheaper cars, governments could mandate greener sourcing policies, he noted.

"It's going to be a big decision point for BHP this year," Lawcock said.

(Reporting by Melanie Burton; Editing by Sonali Paul)

In the name of “national security”, Beijing has imposed new exports controls on graphite, restricting one of the most critical battery metals to Western markets as China attempts to dominate the global EV market. It’s both a threat and an opportunity. It’s an opportunity if you are a rare graphite processing company with operations in both the U.S. and China.

One of the biggest news pieces on the graphite scene since Beijing’s export restrictions was a proposed SPAC deal in December 2023 that could see Graphex Group (NYSE American: GRFX), with a market cap of $40 million, sell its USA processing business for between $100 million and $200 million. The USA processing business would be spun off as a separate Nasdaq listing.

Graphex isn’t a cash-guzzling mining operation with years-long exploration processes to get through: The USA spinoff will be processing graphite—a first in the country—and that’s where some 85% of the graphite profit is. The company is now moving forward quickly with design and equipment selection for its flagship Detroit graphite processing plant and the hunt is on for additional locations, with major JV and offtake deals apparently underway.

Beijing’s market-dominating move has also helped strengthen Graphex China’s operations in East Asia, where output is now expected to triple by the first quarter of 2025.

Led by veteran energy sector leader John DeMaio, Graphex USA is leading a SPAC deal that not only awards shareholders through a buyout worth multiples of the current market capitalization but also gives investors exposure to the most critical supply line for North America’s massive EV push.

On December 6, Graphex Group (NYSE American: GRFX) and its wholly-owned U.S. subsidiary, Graphex Technologies, LLC entered into a Letter of Intent (LOI) with an independent NASDAQ-listed blank check company to acquire 100% of the equity interest of Graphex Tech.

The pre-money enterprise value, net of liabilities, for Graphex Tech is anticipated to be between $100 million and $200 million in a deal that is set to close in the first half of 2024.

This is a US-based company that is building its first graphite processing plant in Detroit, Michigan, and is now on the hunt for more locations across the U.S. and Canada.

It's also in advanced and late-stage testing with the auto industry, battery manufacturers, and OEMs (original equipment manufacturers). And it already has JVs and offtake deals with non-Chinese entities that meet the strict compliance requirements set down by the Biden administration’s Inflation Reduction Act (IRA).

And it’s a critical metals segment that will play a huge role in defining North American security and the energy transition.

Graphite is the biggest—and most critical–component in any lithium-ion battery. It makes up 95-99% of the anode (negative electrode). The average lithium-ion battery contains 15X more graphite than lithium, and for lithium, North America already has a much clearer path to supply not dominated by China.

North America has zero commercial production of refined graphite.

Graphex could end up being the first to domesticate this supply chain.

Right now, it’s in the final stages of the construction of its 15,000-ton-per-annum graphite refining facility in Detroit–the heart of America’s auto industry. First production is expected in the first quarter of 2025.

The Safe China Exposure

The team at Graphex Group (NYSE American: GRFX) has over a decade of experience processing graphite in Asia. The current CTO has designed and built multiple Asian plants, from Korea to China.

All that China-based experience is now being rebuilt in North America, led by Graphex Technologies President John DeMaio– former President, CEO, and Board Member of JouleSmart Solutions, general manager of Siemens Smart Infrastructure, VP of MWH Global, VP of SPG Solar and COO of Thompson Solar Technologies.

From an investor’s point of view, the key to profiting from the graphite supply chain is not mining—it’s processing, which represents over 85% of the value of this segment. And that’s exactly where Graphex USA is focusing. There won’t be any mining overhead expenses– just multi-source, IRA-compliant graphite processing capabilities.

By the third quarter of 2024, Graphex Asia aims to double its graphite production from 10,000 metric tons per year to 20,000 metric tons per year. By the first quarter of 2025, the company aims to triple this to 30,000 metric tons, with bank financing already approved for the production ramp-up. And they are hoping to get ~$5500 per metric ton for that graphite.

And back on the home front in North America, Graphex believes it has multiple raw graphite supply deals lined up to feed its Detroit processing plant—along with other proposed new plants as they come online–in accordance with the IRA sourcing requirements for North American supply that doesn’t come from China.

Late last year, Graphex entered into an LOI with Northern Graphite Corporation (TSXV:NGC) for raw material supply, and signed an MOU with Reforme Group Pty Ltd. And in January this year, they joined forces with Northern Graphite to build a large-scale graphite processing facility in Quebec’s Baie-Comeau region. The partners are now evaluating sites to house a facility that could produce up to 200,000 tons of graphite annually. They also have an LOI with Canada-based Gratomic for raw graphite to evaluate building.

Then, in August this year, they signed the biggest supply deal yet with Syrah Resources’ Balama graphite operation in Mozambique, the largest in existence outside of China, with a production capacity of 350,000 metric tons per year.

Source: Syrah Resources

Both Mozambique and Tanzania are poised to become major graphite miners, home to the fifth- and sixth-largest graphite reserves in the world, respectively.

With Beijing’s restrictions on graphite exports, Graphex represents an interesting way for non-Chinese investors to gain exposure to the China graphite market. Graphex Asia already has the necessary export licenses.

In 2021, China only housed some 22% of global graphite reserves, yet it produced over 79% of the world’s supply because of its processing power. That same year, the U.S. was 100% reliant on foreign sources of processed graphite, one-third of which came from China. Graphex Group (NYSE American: GRFX) is North America’s first chance at diversifying this supply with an unprecedented domestic solution.

Other miners to keep an eye on in 2024:

Compass Minerals International (NYSE: CMP), based in Overland Park, Kansas, is a leading provider of essential minerals, including salt, sulfate of potash, magnesium chloride, and even sustainable lithium. The company's diversified product mix serves a wide range of markets, including agriculture, consumer deicing, water conditioning, and various industrial applications.

Beyond its current offerings, Compass Minerals is investing in new technologies and methods to enhance the efficiency and environmental sustainability of its operations. The company's focus on innovation is particularly evident in its approach to lithium extraction, where it aims to capitalize on the growing demand in the electric vehicle market. This strategic direction not only diversifies their portfolio but also positions Compass Minerals as a key player in the transition to a more sustainable global economy.

Freeport-McMoRan Inc. (NYSE: FCX), based in Phoenix, Arizona, is one of the world's leading mining companies, with significant reserves of copper, gold, and molybdenum. The company's sizeable asset base includes the Grasberg minerals district in Indonesia, one of the world's largest copper and gold deposits, and significant mining operations in the Americas. With copper being a critical material in renewable energy and electric vehicle technologies, Freeport-McMoRan stands to benefit from the global push towards greener economies.

Freeport-McMoRan is also actively involved in community engagement and environmental stewardship. The company has implemented various initiatives aimed at reducing its environmental footprint and promoting sustainable mining practices. These efforts include water management, biodiversity conservation, and emission reduction strategies. By focusing on responsible mining, Freeport-McMoRan is not only ensuring compliance with environmental standards but is also contributing to the broader goal of sustainable development in the regions it operates.

Rio Tinto (NYSE: RIO), a global leader in the mining and metals sector, is known for its operational efficiency and commitment to sustainable development. The UK-Australian multinational corporation operates in around 35 countries worldwide and has significant assets across several commodities including aluminum, copper, diamonds, coal, iron ore, and uranium. Rio Tinto's robust portfolio of world-class assets is further reinforced by strong market fundamentals, especially in the copper and iron ore markets, making it an interesting proposition for potential investors.

In addition to its extensive mining operations, Rio Tinto is a leader in the implementation of cutting-edge technologies and sustainable mining practices. The company's commitment to reducing its carbon footprint and protecting the environment is evident in its various initiatives, such as investments in renewable energy and efforts to rehabilitate mining sites post-extraction. Rio Tinto's proactive approach to corporate responsibility and sustainability is an integral part of its business strategy, setting a standard for the mining industry.

FMC Corporation (NYSE: FMC), based in Philadelphia, Pennsylvania, is a global agricultural sciences company that delivers innovative technology to growers around the world. While not a mining company in the traditional sense, FMC has a significant stake in lithium, a critical component in rechargeable batteries and other high-tech applications.

FMC's commitment to innovation and sustainability is noteworthy, and the company's agricultural products contribute to increased crop yield and quality, making it a significant player in addressing global food security issues. In recent years, FMC has benefited from robust demand for its crop protection products, driven by higher commodity prices and strong agricultural market fundamentals.

Livent Corporation (NYSE: LTHM), a spin-off from FMC Corporation, is a global leader in lithium technology, powering the electric vehicle revolution. The Philadelphia-based company supplies lithium used in batteries for hybrid and electric vehicles, mobile devices, and other consumer electronics. Livent's position in the high-growth lithium market, driven by increasing demand for electric vehicles, makes it a compelling option for investors seeking exposure to the green energy transition.

Livent Corporation is expanding its reach in the global lithium market by investing in new technologies and forming strategic partnerships. Their focus on sustainable lithium extraction and processing methods demonstrates a commitment to environmental responsibility. As the demand for lithium continues to grow, Livent's role in supplying this critical material for electric vehicles and renewable energy storage becomes increasingly significant, positioning them as a key contributor to the green energy transition.

BHP Group (NYSE: BHP), headquartered in Melbourne, Australia, is one of the world's largest mining companies. It primarily deals in commodities like iron ore, copper, coal, and nickel. BHP is particularly known for its large-scale operations and has significant assets in Australia, North and South America, and other regions. The company's focus on sustainable mining practices and its diverse portfolio of commodities make it a key player in the global mining industry.

BHP Group's commitment to sustainability extends to all aspects of its operations. The company is investing in technologies to reduce greenhouse gas emissions and improve water usage efficiency. BHP's focus on creating sustainable mining practices reflects a broader trend in the industry towards environmental responsibility and could set new standards for mining operations worldwide.

Vale S.A. (NYSE: VALE) headquartered in Rio de Janeiro, Brazil, is one of the world's largest miners of iron ore and nickel. It also produces copper, coal, manganese, and ferroalloys. Vale has a strong presence in several countries and is known for its large-scale operations, especially in Brazil and Africa. The company's focus on producing essential minerals for global industries, along with its commitment to sustainable mining practices, makes it an important entity in the resources sector.

Vale's focus on sustainability is also prominent in its corporate strategy. The company has made significant investments in renewable energy projects and initiatives to reduce carbon emissions in its operations. Vale's commitment to responsible mining practices and community engagement has been integral in maintaining its position as a leader in the global mining industry, especially in the areas of iron ore and nickel production.

Newmont Corporation (NYSE: NEM) is one of the world's leading gold mining companies and also a producer of copper, silver, zinc, and lead. Newmont operates in various countries including the United States, Canada, Mexico, Dominican Republic, Peru, Suriname, Argentina, Chile, Australia, and Ghana. The company's emphasis on responsible mining practices and its extensive portfolio of assets in gold and other minerals make it a significant player in the global mining sector. Additionally, Newmont's commitment to sustainability and community development initiatives aligns it with modern environmental and social governance criteria.

Newmont Corporation is actively involved in various initiatives to promote sustainable mining practices. These include efforts to minimize the environmental impact of its operations, improve safety standards, and engage with local communities. Newmont's approach to responsible mining is a key aspect of its business strategy, reflecting its commitment to ethical practices and long-term sustainability in the mining sector.By. Tom KoolIMPORTANT NOTICE AND DISCLAIMER

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This article will list the world's top silver mining companies and highlight the recent trends in the silver industry. You can skip our detailed overview of supply and demand intricacies of silver and read 5 Biggest Silver Mining Companies in the World.

Global Silver Demand and Supply

In 2022, the dynamics of global silver demand and supply underwent major changes. The year saw a minor decline in mine production, with a 0.6% drop to 822.4 million ounces, in contrast to the previous year's robust growth of 5.8%. According to the Silver Institute, this decrease primarily resulted from reduced output at lead/zinc mines, notably in China and Peru, where silver production decreased by 3.5% to 248.2 million ounces. However, this decline was partially offset by increased silver production in gold and copper mines, which rose by 1.0% to 129.5 million ounces and 0.8% to 212.0 million ounces, respectively. Production from primary silver mines remained relatively stable, with a marginal 0.1% increase, totaling 228.2 million ounces.

Meanwhile, the demand for silver experienced an upswing in 2022, with total demand increasing by 18% to 1,242 million ounces, reaching its highest level since 2010. Notably, silver recycling continued to rise for the third consecutive year, growing by 3% and reaching a 10-year peak of 180.6 million ounces. This underscores the growing interest in silver as both a mined resource and a recyclable commodity.

Must Read: Top 20 Gold Mining Companies in the World

Major Silver-Consuming Sectors

Silver experiences high demand in key sectors, namely physical investment, jewelry, and silverware. Regarding the investment aspect, the Silver Institute reported a significant increase in physical silver investments for the fifth consecutive year in 2022, reaching a record 332.9 million ounces. Notably, India stood out with a staggering 188% year-over-year increase in silver investments, driven by lower prices and bargain hunting.

Silver jewelry manufacturing also saw impressive growth, rising by 29% to a record 234.1 million ounces in 2022, primarily driven by India. In India, a combination of pent-up demand post-pandemic and restocking led to a doubling of volumes from the previous year. However, excluding India, there was a slight decline in jewelry manufacturing.

The US experienced reduced demand as consumer spending normalized. In contrast, Europe showed some increase in silver jewelry demand, driven by increased local consumption despite a drop in exports from Italy. Thailand, Indonesia, and Turkey also reported growth due to a recovery in exports and improvements in domestic sales. It's worth noting that jewelry manufacturing is expected to decrease by 15% at the end of the fiscal year, returning to pre-pandemic levels, particularly in India, where the market is adjusting after the 2022 surge.

Lastly, silverware manufacturing outpaced jewelry in terms of growth percentage, experiencing an 80% increase in demand in 2022, reaching 73.5 million ounces. This boost, as seen in the jewelry sector, was mainly driven by India, where demand more than doubled in 2022 as employment and income levels returned to pre-pandemic norms.

Also Read: 10 Largest Cobalt Mining Companies and Their Mines in the World

Top Silver Producing Countries

The largest silver-producing countries in the world are Mexico, China, and Peru. In 2022, Mexico led the way with an impressive production of 6,300 metric tons, drawing from its reserves of 37,000 metric tons. Following closely, China also made a significant contribution, producing 3,600 metric tons of silver, supported by its substantial reserves estimated at 71,000 metric tons, according to the US Geological Survey. Peru, ranking third in silver production, boasts the world's largest silver reserves, totaling 98,000 metric tons. In 2022, Peru's commitment to sustainable mining practices resulted in a silver production of 3,100 metric tons.

Let's now talk about the top silver mining companies in the world!

15 Biggest Silver Mining Companies in the World

Our Methodology

We identified the world's largest silver companies based on their average silver production over the past three years. This was determined using data from The Silver Institute's World Silver Surveys of 2022 and 2023, along with the companies' annual reports. The top silver mining companies were ranked in ascending order according to their annual silver yield.

Based on the available data, here are the top silver mining companies in the world:

15. First Majestic Silver Corp (TSE:FR)

Average Annual Silver Production:11.6 million ounces

First Majestic Silver Corp., headquartered in Vancouver, is among the biggest silver mining companies in the world, with a notable presence in Mexico. The company's primary mining sites in Mexico include the San Dimas, Santa Elena, and La Encantada mines. The most prominent among them is the Santa Elena Silver/Gold Mine, which encompasses an extensive area of 102,244 hectares and operates both the Santa Elena and Ermitaño underground mines.

Looking ahead to the end of 2023, First Majestic has set ambitious production targets, aiming to achieve a record high of 33.2 million to 37.1 million silver equivalent ounces. This represents approximately a 12% increase from the previous year. This production goal is further broken down into 10 million to 11.1 million silver ounces and 277,000 to 310,000 gold ounces. The projected all-in sustaining cost per silver equivalent ounce is expected to range between $18.47 and $19.72.

14. Boliden AB (STO:BOL)

Average Annual Silver Production: 11.8 million ounces

Boliden AB, a European company headquartered in Stockholm, primarily focuses on silver extraction in three key areas: the Boliden Area, Garpenberg, and Aitik. The Boliden Garpenberg mine stands out as one of the world's most efficient underground zinc mines and holds the distinction of being Sweden's oldest active mining area. This mine processes complex ores containing a combination of zinc, lead, silver, copper, and gold. In 2022, Garpenberg processed approximately 2,989 kilotons of ore, resulting in the production of metal concentrates, including silver.

13. BHP Group (NYSE:BHP)

Average Annual Silver Production: 12 million ounces

BHP Group (NYSE:BHP), among the world's most valuable mining companies, operates several copper mines, notably the Escondida mine in Chile and the Antamina mine in Peru. Silver is a significant byproduct of copper and zinc mining within the company's operations, contributing to its high global silver production. Another key asset in BHP's silver production portfolio is the Olympic Dam operation in South Australia, known for its vast deposits of copper, gold, silver, and uranium. BHP Group (NYSE:BHP) also manages the Carrapateena and Prominent Hill mines in Australia, both notable for their substantial gold and silver projects.

12. South32 (ASX:S32)

Average Annual Silver Production: 12.7 million ounces

South32, an Australian mining and metals organization, plays a significant role in the global silver mining industry. In the fiscal year 2022, the company achieved a notable milestone by producing 12.3 million ounces of silver. The primary source of this impressive production is the Cannington site located in Queensland, Australia, which ranks among the world's largest silver production sites.

Expanding its operations beyond Australia, South32 is also advancing the Hermosa project in Arizona, USA. This forward-looking project encompasses two significant deposits: the Taylor sulfide deposit, rich in zinc, lead, and silver, and the Clark oxide deposit, known for its zinc, manganese, and silver content.

Also Read: Top 20 Diamond Producing Countries in the World

11. Hecla Mining Company (NYSE:HL)

Average Annual Silver Production: 13.5 million ounces

Founded in 1891, Hecla Mining Company (NYSE:HL) is one of the largest silver-producing companies in the US, operating active mines in Alaska, Idaho, Quebec, and Canada and developing a new mine in Canada's Yukon region.

In 2022, Hecla Mining Company (NYSE:HL) achieved substantial success, reporting a silver production of 14.2 million ounces, a 10% increase over the previous year. This remarkable growth was primarily attributed to substantial production increases at two key mines: the Lucky Friday mine in Idaho, which experienced a 24% boost, and the Greens Creek mine in Alaska, contributing to a 5% rise. Notably, Greens Creek was a major contributor, accounting for 9.7 million ounces of the total silver produced in 2022.

During the first three quarters of 2023, despite a slight decline in silver production in the third quarter compared to the second quarter, the company's overall output for the first nine months of 2023 demonstrated an 8% increase compared to the same period in 2022, totaling 11,407,232 ounces of silver.

10. Volcan Cia Minera (BME:XVOLB)

Average Annual Silver Production: 13.8 million ounces

Volcan Compañia Minera S.A.A., a leading mining firm based in Peru, specializes in various activities, including exploring, extracting, processing, and selling polymetallic ores, with a particular focus on silver. This company is situated in the mineral-rich Central Andes regions of Junin and Pasco, where it operates 16 polymetallic mines: 11 underground and five surface mines, along with six processing plants and a gold mine concentrator. Despite its extensive operations, the company saw a slight decline in silver production in 2022, with output decreasing by 5% to 14.3 million ounces (Moz) from the previous year's 15 Moz.

9. Pan American Silver Corp (NYSE:PAAS)

Average Annual Silver Production:18.3 million ounces

In 2022, Pan American Silver Corp (NYSE:PAAS) successfully produced 18.5 million ounces of silver, meeting its adjusted projection of 18.0 to 18.5 million ounces. Initially, the company had aimed for a higher range of 19.0 to 20.5 million ounces. Additionally, it achieved significant gold production, totaling 552.5 thousand ounces, which fell within its forecasted range of 550.0 to 605.0 thousand ounces for the same period. The third quarter of 2023 marked a notable period for Pan American Silver Corp (NYSE:PAAS) as it recorded a silver output of 5.7 million ounces and achieved a record-breaking gold production of 244.2 thousand ounces.

8. Southern Copper Corp (NYSE:SCCO)

Average Annual Silver Production: 19.7 million ounces

Southern Copper Corporation (NYSE:SCCO), a prominent player in the silver mining sector, has recently experienced fluctuations in its silver production. In the third quarter of 2023, the company produced 4,390,000 ounces of silver, marking a 10% decrease compared to the same period the previous year. This decline was consistent across all their operations, except for the Toquepala mine. Additionally, there was a 7% decrease in the company's silver sales volumes year-over-year.

Despite these production and sales challenges, Southern Copper Corp (NYSE:SCCO) exhibited robust financial performance in the third quarter. The company's net sales increased by 16.2%, primarily attributed to higher prices for molybdenum, silver, and copper. Its net income also showed significant growth, reaching $619.5 million, a 19.4% increase from the previous year's third quarter.

7. Polymetal International plc (OTC:POYYF)

Average Annual Silver Production: 20.08 million ounces

Polymetal International plc operates in Russia and Kazakhstan, consistently delivering strong performance. In the third quarter of 2023, the company's gold equivalent production increased by 12% compared to the same period the previous year, reaching a total of 508 thousand ounces. This significant rise was primarily driven by heightened production levels at their Russian facilities, including Urals, Mayskoye, and Dukat sites. Throughout the first nine months of 2023, Polymetal continued this growth trajectory, reporting a 6% year-on-year increase in gold equivalent production, totaling 1,272 thousand ounces, with substantial contributions from both Kazakhstan and Russia.

6. Hindustan Zinc Ltd (NSE:HINDZINC)

Average Annual Silver Production: 22.02 million ounces

Hindustan Zinc Ltd, headquartered in Udaipur, Rajasthan, India, has achieved the remarkable status of being the world's fifth-largest silver producer, as highlighted in the 2023 World Silver Survey by The Silver Institute. Since its inception in 2002, when it produced 41 tonnes, the company has steadily expanded its production capacity to reach 800 tonnes. In 2022, Hindustan Zinc Ltd produced an impressive 694 tonnes (22.2 million ounces) of silver. Notably, the company's silver refinery in Pantnagar, Uttarakhand, has earned recognition from the London Bullion Market Association (LBMA) and holds a place on the prestigious "London Good Delivery" list. The silver produced at Hindustan Zinc's refinery boasts an exceptional purity level of 99.99%, adhering to the stringent standards set by the LBMA.

Click to continue reading 5 Biggest Silver Mining Companies in the World.

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The world’s biggest miner, which is entering production of the crop nutrient to add exposure to population growth, has been searching for ways to speed up the Jansen project for more than a year as the long-term outlook for fertilizer prices improves.

The company said Tuesday that it was now going ahead with its so-called stage two expansion, even before the first phase of the mine is in production. BHP, which had already committed more than $10 billion to the project, said the second stage would cost another $4.9 billion.

Fertilizer prices surged after Russia’s invasion of Ukraine as soaring natural gas prices — a crucial feedstock — raised costs. Sanctions on Belarusian potash and moves by China to rein in shipments also tightened the market. While prices have come off their highs, companies like BHP expect the market to remain tight.

BHP finally approved construction of the Jansen mine in Saskatchewan, Canada, in 2021 after years of debate over the huge price tag. Jansen could operate for a century, and eventually grow to a scale that would rival the size of the company’s flagship Pilbara iron ore operations, BHP has said.

Jansen is expected to start production in 2026, producing just over 4 million tons a year. The phase two expansion will see that double to around 8.5 million tons a year, making it one of the world’s biggest fertilizer mines.

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Brisbane, Queensland, Australia–(Newsfile Corp. – October 30, 2023) – Graphene Manufacturing Group Limited (TSXV: GMG) ("GMG" or the "Company") is pleased to provide a business update on the commercialisation progress of THERMAL-XR® powered by GMG Graphene.

GMG has now received forward orders of over AU$400k for THERMAL-XR® from various distributors and customers worldwide. Most of the value of these orders is conditional on the in-country approval for the THERMAL-XR® to be imported from Australia and sold into that country for the product's initial launch.

The Company also continues to progress negotiations with a wide range of distributor and direct industrial end-use customers for a range of applications and hopes to make further announcements soon.

Preparations for the early 2024 product launch in the USA by Nu-Calgon are advanced with marketing, sales and customer engagement activities well progressed supported by continuing demonstrations of successful energy savings results. A recent demonstration project in Texas achieved an estimated 36% energy savings result, as per Figure 1. The air conditioner serviced was a 30-ton Aaon packaged rooftop air-conditioning system, as per Figure 2.

Figure 1.0 Energy Consumption Reduction from Thermal-XR® Service

To view an enhanced version of this graphic, please visit:https://images.newsfilecorp.com/files/8082/185596_gmg1en.jpg

Figure 2.0 Air Conditioning Equipment for Texas Demonstration Project

To view an enhanced version of this graphic, please visit:https://images.newsfilecorp.com/files/8082/185596_gmg2en.jpg

THERMAL-XR® is progressing through the USA Environmental Protection Agency's (EPA) approval process to import and sell in the USA. All the required documentation has been submitted, and the EPA has assigned a case number as part of the thorough evaluation of the product's safety and environmental impact. The Company believes the potential approval will be received in Q4'23.

To support distributors, and advance the adoption and ease of explanation for THERMAL-XR® GMG has developed an online virtual tour of the THERMAL-XR® Demonstration Centre on its website:www.graphenemg.com/graphene-products/thermal-xr/virtual-tour/

GMG has also successfully passed Stage One (Gap Analysis) of the ISO 9001 accreditation process and is on track to complete the final stages and receive full accreditation for ISO9001, for Quality Management, in H1 2024. GMG sees ISO 9001 accreditation as an important table stake to become a commercial manufacturing operation for our energy saving and energy storage products while also providing a structured basis for continuous improvement for our company's operations and customer satisfaction.

GMG's Managing Director and CEO, Craig Nicol, commented: "The progress GMG is making is exciting. End customers and distributors are now starting to generate notable revenue for the Company, and our THERMAL-XR® product is now starting to be recognised as being an energy-savings solution for Heating, Ventilation, Air-Conditioning, Cooling and Refrigeration (HVAC-R) equipment as well as a range of industrial applications. We continue to build capabilities to support these expected increased sales by upgrading our production facilities including our quality management systems."

GMG's 4 critical business objectives remain to:

Produce Graphene and improve/scale the production process

Build Revenue from Energy Savings Products

Develop Next-Generation Battery

Develop Supply Chain, Partners & Project Execution Capability

About THERMAL-XR® powered by GMG Graphene:

THERMAL-XR® COATING SYSTEM is a unique method of improving the conductivity of corroded heat exchange surfaces and improving and maintaining the performance of new units at peak levels. The process coats and protects heat exchange surfaces while improving and rebuilding the lost corroded thermal conductivity and increasing the heat transfer rate by leveraging the physics of GMG Graphene, resulting in an efficiency improvement and a potential power reduction.

THERMAL-XR RESTORE® is powered by GMG Graphene. PATENT PENDING

About GMG www.graphenemg.com

GMG is a clean-technology company which seeks to offer energy saving and energy storage solutions, enabled by graphene, including that manufactured in-house via a proprietary production process.

GMG has developed a proprietary production process to decompose natural gas (i.e. methane) into its elements, carbon (as graphene), hydrogen and some residual hydrocarbon gases. This process produces high quality, low cost, scalable, 'tuneable' and low/no contaminant graphene suitable for use in clean-technology and other applications. The Company's present focus is to de-risk and develop commercial scale-up capabilities, and secure market applications.

In the energy savings segment, GMG has focused on graphene enhanced heating, ventilation and air conditioning ("HVAC-R") coating (or energy-saving paint), lubricants and fluids. In the energy storage segment, GMG and the University of Queensland are working collaboratively with financial support from the Australian Government to progress R&D and commercialization of graphene aluminium-ion batteries ("G+AI Batteries").

For further information please contact:

Craig Nicol, Chief Executive Officer & Managing Director of the Company at craig.nicol@graphenemg.com, +61 415 445 223
Leo Karabelas at Focus Communications Investor Relations, leo@fcir.ca, +1 647 689 6041

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accept responsibility for the adequacy or accuracy of this news release.

Cautionary Note Regarding Forward-Looking Statements

This news release includes certain statements and information that may constitute forward-looking information within the meaning of applicable Canadian securities laws. Forward-looking statements relate to future events or future performance and reflect the expectations or beliefs of management of the Company regarding future events. Generally, forward-looking statements and information can be identified by the use of forward-looking terminology such as "intends", "expects" or "anticipates", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would" or will "potentially" or "likely" occur. This information and these statements, referred to herein as "forward‐looking statements", are not historical facts, are made as of the date of this news release and include without limitation, statements regarding the progression of end-user engagement in the United States, the official NuCalgon launch and the timing thereof, the impact of case studies on establishing the North American user experience with THERMAL-XR®, the advancement of GMG's ISO 9001 accreditation and the timing and benefits therefrom, the progression of THERMAL-XR® through the Environmental Protection Agency's approval process, and the recognition of THERMAL-XR® as an energy savings alternative for HVAC-R equipment.

Such forward-looking statements are based on a number of assumptions of management, including, without limitation, assumptions relating to the timing and benefits of the expected official NuCalgon launch, the impact of case studies on establishing the North American user experience with THERMAL-XR®, that positive energy savings results will drive user engagement in the United States, that GMG will obtain its ISO 9001 accreditation on the expected timeline and derive the expected benefits therefrom, that THERMAL-XR® will progress through the Environmental Protection Agency's approval process on the expected timeline, and that recognition of THERMAL-XR® as an energy savings alternative in the HVAC-R market is increasing. Additionally, forward-looking information involves a variety of known and unknown risks, uncertainties and other factors which may cause the actual plans, intentions, activities, results, performance or achievements of GMG to be materially different from any future plans, intentions, activities, results, performance or achievements expressed or implied by such forward-looking statements. Such risks include, without limitation: that the expected official NuCalgon launch will not occur in early 2024 or at all, that the Company's case study will not help establish a North American user experience with THERMAL-XR®, that THERMAL-XR®'s energy saving results will not drive user engagement as currently expected by management, that GMG will not obtain its ISO 9001 accreditation in H1 2024 or at all, that THERMAL-XR® will not be approved by the Environmental Protection Agency by Q4 2023 or at all, that THERMAL-XR® will not be seen as an energy savings alternative in the HVAC-R market, risks relating to the extent and duration of the conflict in Eastern Europe and its impact on global markets, the volatility of global capital markets, political instability, the failure of the Company to obtain regulatory approvals, attract and retain skilled personnel, unexpected development and production challenges, unanticipated costs and the risk factors set out under the heading "Risk Factors" in the Company's annual information form dated October 18, 2022 available for review on the Company's profile at www.sedarplus.ca.

Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information. Readers are cautioned that reliance on such information may not be appropriate for other purposes. The Company does not undertake to update any forward-looking statement, forward-looking information or financial out-look that are incorporated by reference herein, except in accordance with applicable securities laws. We seek safe harbor.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/185596

(Bloomberg) — Vast heaps of crushed brown rock hem the Indian Ocean at Western Australia’s Parker Point port — each a stockpile of 200,000 tons of iron ore, ready to be poured into a procession of bulk carriers bound for Asia’s steel mills.

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Rio Tinto Group, the world’s largest iron ore producer, shipped its first cargo of the steelmaking ingredient from this spot in 1966, at the dawn of a boom that minted billionaires and lifted the Australian economy, generating A$1.3 trillion ($820 billion) in earnings in the past two decades alone. Last year, iron ore shipments accounted for about 5% of the country’s gross domestic product.

But now China is cooling, while steel producers are under pressure to clean up a sector that accounts for at least 7% of global greenhouse gas emissions, a change that will require new methods and higher-quality raw materials. Much of the dry, dusty Pilbara region’s gargantuan resource base may no longer make the grade.

Rio, BHP Group Ltd. and Fortescue Metals Group Ltd. produce almost two-thirds of the world’s seaborne iron ore from Western Australia, and margins remain enviable. For the first time in a generation, though, the specter of disruption looms over mining’s most reliable profit generator.

“Australia’s ore industry is now at the start of a long-term structural decline,” said Tom Price, a London-based analyst at Liberum Capital Ltd. “It’s a fundamental shift that will resonate across the Australian economy.”

The first, and most urgent, question is China, which accounts for about 85% of Australia’s export earnings from iron ore.

Demand for steel in the second-biggest economy has plateaued and production is on track to peak before the end of the decade, dented by a years-long crisis in China’s property sector, which has typically consumed more than a third of the country’s steel output. While there’s some growth in smaller segments like manufacturing of electric cars and air conditioners, the economy is no longer building at breakneck speed, meaning the nation’s iron ore imports are forecast to decline. Impact is inevitable, even if other emerging nations make up for some of China’s lost appetite.

Still, the more intractable long-term challenge for the Pilbara’s giants may well be a green one.

At least 70% of steel is produced today using a process that’s been deployed in much the same way since the 14th century: metallurgical coal is heated to create coke, which is then used in a blast furnace to melt iron ore at temperatures of more than 1800C.

It’s an energy-intensive activity and one that produces about two tons of carbon dioxide for each ton of liquid steel, according to Rio.

Global demand for steel is still rising, and will climb by as much as a quarter through 2050, as India and developing economies across Asia industrialize — but investor, consumer and climate pressure on one of the dirtiest corners of industry is growing. Governments are acting too, with policies like the European Union’s carbon border adjustment mechanism, that penalizes carbon-heavy imports.

Read more: What It Would Take to Make Steelmaking Greener: QuickTake

The trouble for big diggers is that there are few attractive alternatives. Existing lower-emissions options include the use of electric arc furnaces — a method that doesn’t require coal and uses recycled steel scrap in place of iron ore. A shaft furnace route, deployed in about 5% of steel production, needs high grade pellets with low levels of impurities.

Among the most favored prospective solutions is to combine a renewables-powered electric furnace with direct reduced iron, a material produced by deploying natural gas to remove oxygen from premium ores. Eventually replacing the gas with green hydrogen — created using solar or wind energy — could dramatically cut steel emissions.

But Australia’s typical iron ore has a grade of between 56% and 62%, making it largely unsuitable for DRI production — or only with additional processing that could add as much as 25% to costs, according to Wood Mackenzie Ltd.

“The premium for higher grade material is going to increase significantly,” said David Cataford, chief executive officer of Champion Iron Ltd., a competitor to Australian producers which supplies higher-grade iron ore from Canada. “If you’re producing lower grade, we do feel it’s going to be more complicated in the medium-term.”

The biggest miners say they already produce the better stuff. Vale SA, which ships higher-quality raw material from Brazil and expects to command a green premium in future, is among those eager to forecast a world that favors richer ores. But higher-grade production — with an iron content of 66% or more — currently makes up only about 3% of global supply, so the race is on to crank up output from projects like the expansive (and expensive) Simandou development in Guinea, in which Rio is an investor.

“There’s an obvious shortage if demand ramps up during the course of decarbonization,” said Liu Yinghao, technical director at the low carbon metallurgy innovation center of China Baowu Steel Group Corp., one of the world’s top steelmakers.

The shortfall in higher grade iron ore could be as much as 200 million tons a year by 2050, Wood Mackenzie estimated in a report this month — a volume roughly equivalent to about a fifth of China’s current annual imports.

To plug the gap and hold on to their position in the market, Australia’s iron ore producers are experimenting with everything from microbes to straw, in a series of trials aimed at making their materials suitable for greener steelmaking. BHP is studying use of carbon capture technology at conventional steel mills and has a pilot with Hatch Ltd. to build an electric smelting furnace — a method that adds an additional process step and holds potential to utilize lower-grade raw material.

“If we can crack the code on the Pilbara ores, that is potentially a game changer,” Tania Archibald, chief executive for Australian steel products at BlueScope Steel Ltd. — among 40 entities collaborating with Rio — told an investor day last month.

Billionaire Andrew Forrest’s Fortescue, meanwhile, has begun production of small volumes of high-quality magnetite ore at its Iron Bridge project in the Pilbara, and has tested a coal-free electrolysis method to convert ore to green iron.

Forrest sees potential to go further than that intermediate step, and to use Australia’s advantages in renewable energy for a low-carbon revival of a domestic steelmaking sector that saw output peak a quarter of a century ago.

“Australia has got everything going for it to make its own steel,” Forrest said earlier this month in Perth, citing the country’s solar and wind resources, and potential to produce green hydrogen. “The policies right now channel against doing that — and encourage offshore production.”

Steelmakers are positioning for that shift, including South Korean giant Posco, which aims to develop new industrial facilities in Port Hedland, the Pilbara’s export hub.

Few changes come fast in mining. Australia’s iron ore incumbents say they have sufficient time to make the technology breakthroughs or strategy shifts they need to continue to prosper.

“The transition away from coal-based steel making is a reality, but it will take some time and there remain significant uncertainties,” said Simon Farry, Rio’s head of steel decarbonization.

After all, traditional blast furnaces in Asia are relatively new — on average about 12 years old in China, compared to more than 40 years across the mostly wealthy nations in the Organisation for Economic Co-operation and Development — and will operate for decades more, according to BHP’s Chief Economist Huw McKay. “The age of capital stocks is a critical factor in assessing the energy transition,” he told Bloomberg Television in an Oct. 24 interview. India will likely to prioritize the need for affordable steel from existing processes, he said.

But several markets are already adapting quickly, including Japan, South Korea, and — to a more limited extent — China, as Vale said in a written response to questions. Iron ore’s No. 2 supplier is adding output tailored to direct reduction in Brazil, and developing hubs in locations including Saudi Arabia, the United Arab Emirates and Oman to produce materials from as soon as 2027 for future green steelmaking.

Australia’s mining industry has been caught out before by the pace of change. Back in the early 2000s, it struggled to keep up with China’s accelerating iron ore consumption. Now, the risk is repeating the error at the other end of the economic and green cycle.

“The world is going to decarbonize,” Vale said. “If we don’t act quickly, we could miss this opportunity.”

–With assistance from Yee Xing Ng "Liz", Jacob Lorinc, Mariana Durao, Thomas Biesheuvel and James McIntyre.

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The board of Southern Copper Corporation (NYSE:SCCO) has announced that the dividend on 22nd of November will be increased to $1.00, which will be 100% higher than last year's payment of $0.50 which covered the same period. This will take the annual payment to 5.0% of the stock price, which is above what most companies in the industry pay.

See our latest analysis for Southern Copper

Southern Copper Is Paying Out More Than It Is Earning

A big dividend yield for a few years doesn't mean much if it can't be sustained. Prior to this announcement, Southern Copper's dividend was making up a very large proportion of earnings and perhaps more concerning was that it was 102% of cash flows. Paying out such a high proportion of cash flows certainly exposes the company to cutting the dividend if cash flows were to reduce.

The next 12 months is set to see EPS grow by 11.3%. If the dividend continues on its recent course, the payout ratio in 12 months could be 111%, which is a bit high and could start applying pressure to the balance sheet.

historic-dividendDividend Volatility

The company's dividend history has been marked by instability, with at least one cut in the last 10 years. Since 2013, the dividend has gone from $0.68 total annually to $3.50. This means that it has been growing its distributions at 18% per annum over that time. Dividends have grown rapidly over this time, but with cuts in the past we are not certain that this stock will be a reliable source of income in the future.

Dividend Growth Could Be Constrained

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. It's encouraging to see that Southern Copper has been growing its earnings per share at 23% a year over the past five years. EPS is growing rapidly, although the company is also paying out a large portion of its profits as dividends. If earnings keep growing, the dividend may be sustainable, but generally we'd prefer to see a fast growing company reinvest in further growth.

Southern Copper's Dividend Doesn't Look Sustainable

In summary, while it's always good to see the dividend being raised, we don't think Southern Copper's payments are rock solid. While we generally think the level of distributions are a bit high, we wouldn't rule it out as becoming a good dividend payer in the future as its earnings are growing healthily. Overall, we don't think this company has the makings of a good income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. To that end, Southern Copper has 3 warning signs (and 2 which are potentially serious) we think you should know about. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

(Bloomberg) — Australia’s accelerating shift from coal-fired power to clean energy is stoking volatility in its power markets and raising concerns for large businesses, according to BHP Group Ltd., the country’s most valuable company.

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The main National Electricity Market, which covers about 80% of Australia’s demand, is experiencing the largest fluctuations in daily electricity prices globally, driven by issues including unplanned outages of coal plants and the integration of rooftop solar, according to Rystad Energy.

“It’s a nervous time to be a major consumer of electricity on that particular grid,” Huw McKay, BHP chief economist, said Tuesday in an interview with Bloomberg Television.

Following its acquisition of OZ Minerals Ltd., BHP is seeking to lift copper output from mines in South Australia, and wary over the unpredictability in the state’s energy system as work continues on constructing an interconnector linking the region to neighboring New South Wales, according to McKay. “We are anticipating a period of heightened volatility,” he said.

Read More: BHP Sees Squeeze for Global Copper Markets Later This Decade

South Australia had the country’s highest wholesale electricity prices in the three months to Sept. 30, averaging A$92 ($58) per megawatt hour compared to a national figure of A$63 per megawatt hour, according to the Australian Energy Market Operator.

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Teck Resources Limited TECK recently announced that its third-quarter 2023 steelmaking coal sales volumes have been impacted by the slower-than-expected supply-chain recovery following the wildfires in British Columbia, labor disruption at ports, and plant challenges.

Steelmaking coal sales volumes were 5.2 million tons in the third quarter compared with 5.6 million reported in the year-ago quarter. It also came in lower than the sales volume of 6.2 million tons in the second quarter of 2023. Volumes also fell short of the company’s guidance of 5.6 to 6.0 million tons for the quarter.

During its second-quarter conference call, Teck Resources had provided the guidance factoring in lower inventories at the end of the second quarter and planned maintenance shutdown activities at two of its operations during the third quarter.

The company had also stated that labor disruption at ports could impact its sales volumes in the third quarter. Teck Resources had thus anticipated a rise in transportation costs as it utilized its additional port capacity to deliver on customer commitments. The company, however, maintained its transportation cost guidance at 45-48 CAD per ton for the steelmaking coal segment in 2023. Teck Resources reported average realized steelmaking coal price of $229 per ton in the third quarter of 2023. This was lower than the steelmaking coal prices of $304 per ton in the third quarter of 2022 and $264 per ton in the second quarter of 2023. TECK expects to report provisional pricing adjustments of $23 million in its third-quarter results, which are scheduled to be reported on Oct 24, 2023.

In the second quarter of 2023, the segment reported sales of CAD$2.25 billion ($1.68 billion), reflecting a year-over-year slump of 39% due to the significant decline in steelmaking coal prices from the all-time highs in the same period last year. The segment reported a gross profit of CAD$1,100 million ($821 million) in the second quarter, which was down 57% from the second quarter of 2022.We expect the steelmaking coal segment’s sales to be around CAD $1.63 billion ($1.21 billion) in the third quarter of 2023. Compared with the sales of CAD $2.27 billion, the figure indicates a year-over-year drop of 28%.Teck Resources had earlier stated it is actively engaged in the divestment of the steelmaking coal business and is engaging with a number of potential suitors. The business is garnering interest due to its significant high-quality steelmaking coal reserves and stable demand outlook.Teck confirmed in June that it is engaging with Glencore GLNCY about their proposal regarding the steelmaking coal business. Glencore has offered about $8.2 billion to buy the business.In case this business is sold, TECK will be able to focus solely on the metals needed for the energy transition, such as copper and zinc. Teck Resources and other mining companies like BHP Group BHP and Rio Tinto plc RIO, among others, are trying to capitalize on the growing demand for copper, driven by electric vehicles, renewable energy and infrastructure investments.BHP has created a new copper province in South Australia following the acquisition of OZ Minerals in May 2023. The company is investing strategically in new ideas, technologies and countries through exploration and early-stage copper and nickel prospects to capture growth opportunities.Rio Tinto, in August 2023, had announced that it has formed a joint venture to develop the La Granja copper project in Peru. It is one of the largest undeveloped copper deposits in the world and will augment Rio Tinto’s copper portfolio.The company is also developing the Oyu Tolgoi project in the South Gobi region of Mongolia. It is one of the largest known copper and gold deposits in the world. When the underground mine is complete, it will be the fourth-largest copper mine in the world.

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Bitcoin (BTC-USD)

Bitcoin prices headed towards the $30,000 mark on Friday as the market was buoyed by optimism about the potential approval in the US of an exchange traded fund (ETF). This means the cryptocurrency was trading at its highest point since mid-August.

Earlier in the week it had briefly spiked to similar levels, after a false report inaccurately asserted that BlackRock's proposed spot bitcoin ETF had gained approval.

The report by Cointelegraph caused a surge in trading activity and volatility. While bitcoin pulled back after the report was debunked, it has still gained throughout the week.

Analysts view the false alarm at the beginning of the week as a dress rehearsal for what would occur if a spot bitcoin ETF were actually to be approved. In the past week, indications that the US Securities and Exchange Commission (SEC) will approve a spot bitcoin ETF have been increasing.

Tesla (TSLA)

Elon Musk brainchild Tesla looked set to open slightly lower again on Friday, after its stock lost more than 9% in the trading session before.

The electric vehicle maker missed on earnings, while Musk voiced concerns about the global economy, future of its Mexico Gigafactory, and a challenging Cybertruck ramp-up.

“We dug our own grave with Cybertruck,” Tesla CEO Elon Musk said during the company’s Q3 earnings call on Wednesday night. “Special products that come along once in a long while are just incredibly difficult to bring to market, to reach volume, to be prosperous. It's fundamental to the nature of the newness.”

Despite the company finally revealing a 30 November delivery date for the Cybertruck, Musk warned of “enormous challenges” in ramping up Cybertruck production and that volume production of 250,000 units would not be reached until 2025.

AT&T (T)

Telecoms giant AT&T saw its stock finish 6.6% higher on Thursday as it topped its third-quarter earnings expectations, raising its free cash flow guidance.

AT&T earnings for the September quarter fell 6% to 64 cents. Revenue from continuing operations climbed 1% to $30.35bn.

Analysts had projected AT&T earnings of 62 cents a share on revenue of $30.2bn, according to FactSet. A year earlier, AT&T earned 68 cents a share on revenue of $30bn from continuing operations.

Blackstone (BX)

Earnings news was less positive for Blackstone, which saw its stock drop around 7.9% after a miss on Thursday.

The company reported a 12% drop in quarterly profit, as high interest rates continue to take their toll on financial services.

Distributable earnings, which represents the cash available to pay dividends to shareholders, fell to $1.2bn in the quarter, from $1.4bn a year earlier. That translated to distributable earnings per share of 94 cents, which missed the average analyst estimate of $1.01, according to LSEG data.

Watch: Crypto ETFs: How Europe is paving the way for the US

For Immediate Release

Chicago, IL – October 20, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Visa Inc. V, AbbVie Inc. ABBV, BHP Group Ltd. BHP, Caterpillar Inc. CAT and Boston Scientific Corp. BSX.

Here are highlights from Thursday’s Analyst Blog:Top Research Reports for Visa, AbbVie and BHP

The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Visa Inc., AbbVie Inc. and BHP Group Ltd. These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.You can see all of today’s research reports here >>>Visa shares have outperformed the Zacks Financial Transaction Services industry over the past year (+27.9% vs. +21.7%). The company’s numerous buyouts and alliances paved the way for long-term growth and consistently drove its revenues.Constant investments in technology are solidifying its position in the payments market. A shift in payments to the digital mode is a boon for Visa. The company's steady domestic volumes and transactions rise will aid its overall performance. A strong cash position enables it to boost shareholder value.However, high operating expenses stress its margins. Ramped-up client incentives will dent the top line. Its volumes are likely to see diminishing effects of the Russia-Ukraine conflict. As such, this stock warrants a cautious stance.(You can read the full research report on Visa here >>>)Shares of AbbVie have gained +8.7% over the past year against the Zacks Large Cap Pharmaceuticals industry’s gain of +27.8%. The company has several new drugs in its portfolio that have the potential to drive the top line to make up for lost Humira revenues. Skyrizi and Rinvoq have established outstanding launch trajectories bolstered by the approval in new indications.It has several early/mid-stage candidates that have blockbuster potential. However, there are concerns about long-term sales growth since Humira generics have entered the U.S. market. Increasing competition from newer therapies is hurting Imbruvica’s sales.Slowing consumer demand due to economic pressure is hurting the aesthetics franchise’s sales. Nonetheless, though revenues are expected to decline in 2023, AbbVie expects to return to robust sales growth in 2025. Estimate movements have been mixed ahead of Q3 results. ABBV reported impressive earnings surprise in recent quarters.(You can read the full research report on AbbVie here >>>)Shares of BHP have gained +25.4% over the past year against the Zacks Mining – Miscellaneous industry’s gain of +26.7%. Iron ore prices had earlier lost steam on weak demand in China. Hopes of a pickup in demand in China, owing to a fresh round of stimulus measures for new infrastructure projects, helped lift up prices lately.Going forward, iron ore prices will be supported by demand in the automotive sector, infrastructure and housing market. Copper and nickel prices will be fueled by demand for electric vehicles.BHP’s investment in projects with a focus on future–facing commodities like copper, nickel and potash will aid growth. Efforts to make operations more efficient through technology will drive earnings.(You can read the full research report on BHP here >>>)Other noteworthy reports we are featuring today include Caterpillar Inc. and Boston Scientific Corp.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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BHP Group and Japan’s Mitsubishi have agreed to sell two jointly owned steelmaking coal mines in Australia to Whitehaven Coal for up to $4.1 billion in cash. It’s a deal that shows there are still buyers for coal assets, despite worries over their carbon emissions. Higher-quality metallurgical coal is in demand for operations looking to reduce emissions.

Stock pickers are generally looking for stocks that will outperform the broader market. And in our experience, buying the right stocks can give your wealth a significant boost. To wit, the Anglo American share price has climbed 37% in five years, easily topping the market decline of 0.3% (ignoring dividends).

Since the stock has added UK£1.6b to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

See our latest analysis for Anglo American

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Anglo American's earnings per share are down 6.4% per year, despite strong share price performance over five years.

Essentially, it doesn't seem likely that investors are focused on EPS. Because earnings per share don't seem to match up with the share price, we'll take a look at other metrics instead.

We note that the dividend is higher than it was previously – always nice to see. Maybe dividend investors have helped support the share price. The revenue growth of about 7.2% per year might also encourage buyers.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

Anglo American is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. Given we have quite a good number of analyst forecasts, it might be well worth checking out this free chart depicting consensus estimates.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of Anglo American, it has a TSR of 82% for the last 5 years. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

Investors in Anglo American had a tough year, with a total loss of 11% (including dividends), against a market gain of about 9.5%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 13% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we've discovered 3 warning signs for Anglo American that you should be aware of before investing here.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on British exchanges.

(Bloomberg) — BHP Group Ltd. said it agreed to sell two Australian coking coal operations to Whitehaven Coal Ltd. as the world’s biggest miner extends its withdrawal from fossil fuels.

Most Read from Bloomberg

Whitehaven has been selected as the preferred bidder in the divestment process, BHP said in its quarterly production report released Wednesday. Spokespeople for the companies declined to offer further details on the size of the sale.

Read More: BHP’s Iron Ore Output Falls 4% as It Confirms Coal Mine Sale

BHP co-owns the mines, which supply metallurgical coal to steelmakers in markets including China and India, in a 50:50 joint venture with Mitsubishi Corp., and its stakes are worth about $4.2 billion, according to Liberum Capital Ltd. The bidding process for the two mines drew competition from rivals including Indonesia-based mining contractor Bukit Makmur Mandiri Utama PT, Stanmore Resources Ltd. and Peabody Energy Corp.

Since 2021, BHP has announced sales of coal, oil and gas assets in locations including Australia, the US and Colombia under Chief Executive Officer Mike Henry’s strategy to refocus the producer’s portfolio on materials tied to growth in renewable energy, electric vehicles and agriculture. The Melbourne-based company this year completed its biggest deal in more than a decade to add OZ Minerals Ltd. and boost volumes of copper, a key transition metal.

Henry has also focused on shedding costlier mines and argues BHP should only retain its highest-quality metallurgical coal operations which can potentially help customers limit some emissions in the steelmaking process. Royalties on output imposed by Queensland’s government mean the coal mines are unlikely to win major investment in the future, he previously said.

BHP will be the No. 3 supplier of the material after completing the sales and could seek to exit its stakes in remaining assets, Liberum Capital said in a Sept. 20 note.

Read more: BHP Plans to Keep Remaining Coal After Completing Mine Sales

The producer has no current plans to consider sales of other Queensland coking coal operations, Chief Development Officer Johan van Jaarsveld said Oct. 5 in Melbourne.

Shares of BHP rose as much as 0.5% in Sydney on Wednesday, before trading little changed at A$45.59 apiece as at 10:31 a.m. local time. Whitehaven’s shares were halted from trading.

The sale announcement comes as BHP said iron ore production from Western Australia fell 4% in the three months to Sept. 30 from the year-before period. Still, it reaffirmed its total output forecast of the steelmaking material for the full-year that started July 1 at between 282 million to 294 million tons. It also said copper output rose 11% in its first quarter, while metallurgical coal fell 16%.

BHP and closest rival Rio Tinto Group are among the top commodity exporters being closely watched for insight on the economic slowdown in China that’s causing ripple effects across the global economy. The biggest metals-consuming nation’s disappointing post-pandemic recovery and persistent property woes have put downward pressure on steel demand and iron ore prices this year.

(Updates with details of quarterly production output in eighth, ninth paragraphs)

Most Read from Bloomberg Businessweek

Graphene Manufacturing Group (CVE:GMG) Full Year 2023 ResultsKey Financial Results

Net loss: AU$9.32m (loss narrowed by 21% from FY 2022).
AU$0.12 loss per share (improved from AU$0.15 loss in FY 2022).

All figures shown in the chart above are for the trailing 12 month (TTM) period

Graphene Manufacturing Group Earnings Insights

Looking ahead, revenue is forecast to grow 69% p.a. on average during the next 3 years, compared to a 32% growth forecast for the Electrical industry in Canada.

Performance of the Canadian Electrical industry.

The company's shares are down 3.3% from a week ago.

Risk Analysis

What about risks? Every company has them, and we've spotted 4 warning signs for Graphene Manufacturing Group (of which 1 is concerning!) you should know about.

Key Insights

BHP Group's estimated fair value is AU$60.35 based on 2 Stage Free Cash Flow to Equity
BHP Group's AU$44.25 share price signals that it might be 27% undervalued
The US$45.30 analyst price target for BHP is 25% less than our estimate of fair value

In this article we are going to estimate the intrinsic value of BHP Group Limited (ASX:BHP) by projecting its future cash flows and then discounting them to today's value. Our analysis will employ the Discounted Cash Flow (DCF) model. Believe it or not, it's not too difficult to follow, as you'll see from our example!

Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model.

See our latest analysis for BHP Group

What's The Estimated Valuation?

We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.

Generally we assume that a dollar today is more valuable than a dollar in the future, so we discount the value of these future cash flows to their estimated value in today's dollars:

10-year free cash flow (FCF) forecast

	2024	2025	2026	2027	2028	2029	2030	2031	2032	2033
Levered FCF ($, Millions)	US$9.77b	US$10.1b	US$9.87b	US$13.0b	US$13.3b	US$13.5b	US$13.8b	US$14.1b	US$14.4b	US$14.7b
Growth Rate Estimate Source	Analyst x11	Analyst x11	Analyst x9	Analyst x2	Analyst x2	Est @ 2.03%	Est @ 2.03%	Est @ 2.02%	Est @ 2.02%	Est @ 2.02%
Present Value ($, Millions) Discounted @ 8.0%	US$9.0k	US$8.7k	US$7.8k	US$9.5k	US$9.0k	US$8.5k	US$8.0k	US$7.6k	US$7.2k	US$6.8k

("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = US$82b

We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.0%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 8.0%.

Terminal Value (TV)= FCF2033 × (1 + g) ÷ (r – g) = US$15b× (1 + 2.0%) ÷ (8.0%– 2.0%) = US$249b

Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$249b÷ ( 1 + 8.0%)10= US$115b

The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is US$197b. The last step is to then divide the equity value by the number of shares outstanding. Compared to the current share price of AU$44.3, the company appears a touch undervalued at a 27% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope – move a few degrees and end up in a different galaxy. Do keep this in mind.

Important Assumptions

We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at BHP Group as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 8.0%, which is based on a levered beta of 1.202. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.

SWOT Analysis for BHP Group

Strength

Debt is not viewed as a risk.

Dividends are covered by earnings and cash flows.

Weakness

Earnings declined over the past year.

Dividend is low compared to the top 25% of dividend payers in the Metals and Mining market.

Opportunity

Good value based on P/E ratio and estimated fair value.

Threat

Annual earnings are forecast to decline for the next 3 years.

Moving On:

Whilst important, the DCF calculation ideally won't be the sole piece of analysis you scrutinize for a company. The DCF model is not a perfect stock valuation tool. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. Why is the intrinsic value higher than the current share price? For BHP Group, there are three pertinent elements you should further research:

Risks: For example, we've discovered 2 warning signs for BHP Group (1 is concerning!) that you should be aware of before investing here.

Future Earnings: How does BHP's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.

Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing!

PS. Simply Wall St updates its DCF calculation for every Australian stock every day, so if you want to find the intrinsic value of any other stock just search here.

Key Insights

Given the large stake in the stock by institutions, Anglo American's stock price might be vulnerable to their trading decisions
A total of 20 investors have a majority stake in the company with 51% ownership
Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

Every investor in Anglo American plc (LON:AAL) should be aware of the most powerful shareholder groups. With 66% stake, institutions possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Given the vast amount of money and research capacities at their disposal, institutional ownership tends to carry a lot of weight, especially with individual investors. As a result, a sizeable amount of institutional money invested in a firm is generally viewed as a positive attribute.

In the chart below, we zoom in on the different ownership groups of Anglo American.

See our latest analysis for Anglo American

What Does The Institutional Ownership Tell Us About Anglo American?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Anglo American does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Anglo American, (below). Of course, keep in mind that there are other factors to consider, too.

Investors should note that institutions actually own more than half the company, so they can collectively wield significant power. Hedge funds don't have many shares in Anglo American. Our data shows that BlackRock, Inc. is the largest shareholder with 8.5% of shares outstanding. For context, the second largest shareholder holds about 7.3% of the shares outstanding, followed by an ownership of 4.4% by the third-largest shareholder.

After doing some more digging, we found that the top 20 have the combined ownership of 51% in the company, suggesting that no single shareholder has significant control over the company.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Anglo American

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our data suggests that insiders own under 1% of Anglo American plc in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own UK£38m of stock. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 15% stake in Anglo American. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

Our data indicates that Private Companies hold 10.0%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Anglo American is showing 3 warning signs in our investment analysis , you should know about…

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

With its stock down 12% over the past week, it is easy to disregard Harmony Gold Mining (JSE:HAR). But if you pay close attention, you might find that its key financial indicators look quite decent, which could mean that the stock could potentially rise in the long-term given how markets usually reward more resilient long-term fundamentals. In this article, we decided to focus on Harmony Gold Mining's ROE.

Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. Simply put, it is used to assess the profitability of a company in relation to its equity capital.

See our latest analysis for Harmony Gold Mining

How Is ROE Calculated?

The formula for return on equity is:

Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity

So, based on the above formula, the ROE for Harmony Gold Mining is:

14% = R4.9b ÷ R35b (Based on the trailing twelve months to June 2023).

The 'return' is the yearly profit. One way to conceptualize this is that for each ZAR1 of shareholders' capital it has, the company made ZAR0.14 in profit.

Why Is ROE Important For Earnings Growth?

Thus far, we have learned that ROE measures how efficiently a company is generating its profits. We now need to evaluate how much profit the company reinvests or "retains" for future growth which then gives us an idea about the growth potential of the company. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features.

Harmony Gold Mining's Earnings Growth And 14% ROE

At first glance, Harmony Gold Mining's ROE doesn't look very promising. Yet, a closer study shows that the company's ROE is similar to the industry average of 14%. Looking at Harmony Gold Mining's exceptional 65% five-year net income growth in particular, we are definitely impressed. Considering the moderately low ROE, it is quite possible that there might be some other aspects that are positively influencing the company's earnings growth. For example, it is possible that the company's management has made some good strategic decisions, or that the company has a low payout ratio.

We then compared Harmony Gold Mining's net income growth with the industry and we're pleased to see that the company's growth figure is higher when compared with the industry which has a growth rate of 37% in the same 5-year period.

Earnings growth is an important metric to consider when valuing a stock. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. This then helps them determine if the stock is placed for a bright or bleak future. Is Harmony Gold Mining fairly valued compared to other companies? These 3 valuation measures might help you decide.

Is Harmony Gold Mining Efficiently Re-investing Its Profits?

Harmony Gold Mining has a really low three-year median payout ratio of 19%, meaning that it has the remaining 81% left over to reinvest into its business. So it looks like Harmony Gold Mining is reinvesting profits heavily to grow its business, which shows in its earnings growth.

Besides, Harmony Gold Mining has been paying dividends for at least ten years or more. This shows that the company is committed to sharing profits with its shareholders. Our latest analyst data shows that the future payout ratio of the company is expected to drop to 2.9% over the next three years. However, Harmony Gold Mining's future ROE is expected to decline to 7.6% despite the expected decline in its payout ratio. We infer that there could be other factors that could be steering the foreseen decline in the company's ROE.

Conclusion

On the whole, we do feel that Harmony Gold Mining has some positive attributes. Despite its low rate of return, the fact that the company reinvests a very high portion of its profits into its business, no doubt contributed to its high earnings growth. That being so, a study of the latest analyst forecasts show that the company is expected to see a slowdown in its future earnings growth. Are these analysts expectations based on the broad expectations for the industry, or on the company's fundamentals? Click here to be taken to our analyst's forecasts page for the company.

REE Automotive Ltd.

TEL AVIV, Israel, Sept. 21, 2023 (GLOBE NEWSWIRE) — REE Automotive Ltd. (Nasdaq: REE), an automotive technology company and provider of full by-wire electric trucks and platforms, has been included in FreightWaves’ annual FreightTech 100 list, an award spotlighting the most innovative companies in the freight technology sector. FreightWaves provides thought leadership and editorial content focused on economic and innovative technology drivers for the freight transportation ecosystem.

“At REE, we believe in pushing the boundaries of what’s possible in the world of mobility,” said Daniel Barel, CEO and co-founder of REE Automotive. “Being recognized as a FreightTech 100 company not only serves a testament to the hard work and dedication of our team but also reinforces our mission to reshape the future of fleets through our innovative REEcorner™ technology.”

Nearly 900 companies from around the globe were nominated for this year's award program. The 100 finalists were selected by a panel of journalists, analysts and experts handpicked by FreightWaves.

Third-party auditor Henderson, Hutcherson and and McCullough (HHM) will conduct a vote among a select group of CEOs, industry leaders and investors actively engaged in the industry to further narrow down the finalists and the FreightTech 25 will be revealed during the upcoming F3: Future of Freight Festival, scheduled for November 7-9 in Chattanooga, Tenn.

To learn more about REE Automotive’s patented technology and unique value proposition that position the company to break new ground in e-mobility, visit www.ree.auto.

Media ContactMalory Van GuilderSkyya PR for REE Automotive +1 651-335-0585ree@skyya.com

Investor ContactKamal HamidVP Investor Relations | REE Automotive+1 303-670-7756investors@ree.auto

About REE AutomotiveREE Automotive (Nasdaq: REE) is an automotive technology company that allows companies to build any size or shape of electric vehicle on their modular platforms. With complete design freedom, vehicles Powered by REE are equipped with the revolutionary REEcorner™, which packs critical vehicle components (steering, braking, suspension, powertrain and control) into a single compact module positioned between the chassis and the wheel. With proprietary by-wire technology for drive, steer and brake control that eliminate the need for mechanical connections, all four identical REEcorners™ enable REE to build the industry’s flattest EV platforms with more room for passengers, cargo and batteries. REE platforms are future proofed, autonomous capable, offer a low TCO, and drastically reduce the time to market for fleets looking to electrify. To learn more visit www.ree.auto.

Caution About Forward-Looking StatementsThis communication includes certain forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, statements regarding REE or its management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to plans, projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “aim” “anticipate,” “appear,” “approximate,” “believe,” “continue,” “could,” “estimate,” “expect,” “foresee,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “would”, “designed,” “target” and similar expressions (or the negative version of such words or expressions) may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. All statements, other than statements of historical facts, may be forward-looking statements. Forward-looking statements in this communication may include, among other things, statements about REE’s strategic and business plans, technology, relationships and objectives, including its ability to meet certification requirements, the impact of trends on and interest in our business, or product, intellectual property, REE’s expectation for growth, and its future results, operations and financial performance and condition.

These forward-looking statements are based on REE’s current expectations and assumptions about future events and are based on currently available information as of the date of this communication and current expectations, forecasts, and assumptions. Although REE believes that the expectations reflected in forward-looking statements are reasonable, such statements involve an unknown number of risks, uncertainties, judgments, and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements. These factors are difficult to predict accurately and may be beyond REE’s control. Forward-looking statements in this communication speak only as of the date made and REE undertakes no obligation to update its forward-looking statements, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws. In light of these risks and uncertainties, investors should keep in mind that results, events or developments discussed in any forward-looking statement made in this communication may not occur.

Uncertainties and risk factors that could affect REE’s future performance and could cause actual results to differ include, but are not limited to: REE’s ability to commercialize its strategic plan, including its plan to successfully evaluate, obtain regulatory approval, produce and market its P7 lineup; REE’s ability to maintain and advance relationships with current Tier 1 suppliers and strategic partners; development of REE’s advanced prototypes into marketable products; REE’s ability to grow and scale manufacturing capacity through relationships with Tier 1 suppliers; REE’s estimates of unit sales, expenses and profitability and underlying assumptions; REE’s reliance on its UK Engineering Center of Excellence for the design, validation, verification, testing and homologation of its products; REE’s limited operating history; risks associated with building out of REE’s supply chain; risks associated with plans for REE’s initial commercial production; REE’s dependence on potential suppliers, some of which will be single or limited source; development of the market for commercial EVs; risks associated with data security breach, failure of information security systems and privacy concerns; risks related to lack of compliance with Nasdaq’s minimum bid price requirement; future sales of our securities by existing material shareholders or by us could cause the market price for the Class A Ordinary Shares to decline; potential disruption of shipping routes due to accidents, political events, international hostilities and instability, piracy or acts by terrorists; intense competition in the e-mobility space, including with competitors who have significantly more resources; risks related to the fact that REE is incorporated in Israel and governed by Israeli law; REE’s ability to make continued investments in its platform; the impact of the COVID-19 pandemic, interest rate changes, the ongoing conflict between Ukraine and Russia and any other worldwide health epidemics or outbreaks that may arise and adverse global conditions, including macroeconomic and geopolitical uncertainty; the global economic environment, the general market, political and economic conditions in the countries in which we operate; fluctuations in interest rates and foreign exchange rates; the need to attract, train and retain highly-skilled technical workforce; changes in laws and regulations that impact REE; REE’s ability to enforce, protect and maintain intellectual property rights; REE’s ability to retain engineers and other highly qualified employees to further its goals; and other risks and uncertainties set forth in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in REE’s annual report filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 28, 2023 and in subsequent filings with the SEC.

In this piece, we will take a look at the ten best aluminum and aluminum mining stocks to buy. If you want to skip our introduction to the aluminum industry, then check out 5 Best Aluminum and Aluminum Mining Stocks To Buy.

Aluminum is one of the most important metals in the world especially due to its unique properties that place it somewhere in between a metal and a non metal. This is because while aluminum has a high melting point which makes it suitable for use in a variety of cases, the metal is not the best conductor of electricity. Aluminum is also quite resistant to corrosion in most conditions, which makes it a durable choice for building structures that require both robustness and less weight such as airplanes. Additionally, aluminum isn't toxic either which makes it suitable for packaging edibles.

Looking at the global aluminum market as a whole, it was estimated to be worth $159 billion by the end of 2021 and $255 billion in the following year. From then until 2029, the industry is expected to grow at a compounded annual growth rate (CAGR) of 6.1% by the end of 2029 to be worth $255 billion by the end of the forecast period. The global aluminum industry, like other sectors, was disrupted during the coronavirus pandemic as large scale industry and manufacturing shut downs reduced the demand for the metal. A key benefit of aluminum is that the metal does not lose strength or consistency after recycling, which makes it quite suitable for use cases such as soft drink cans. Additionally, a key drive of global aluminum demand is expected to come from the automobile industry, due to the metal's light weight and strength – advantages that we have mentioned above.

Shifting gears to take a look at aluminum prices, there are several indexes that track the commodity. Aluminum prices typically correlate with the economy, since more construction and industrial production incentivize producers to expand their mining activities and produce more. There are different grades of aluminum and their prices often vary by quite a bit. For example, earlier this year when the London Metals Exchange (LME) decided to continue allowing Russian aluminum to be listed, prices of European 5083 aluminum were around $5,000 a metric ton while prices for Chinese aluminum stood at roughly $2,600.

We've taken a detailed look at the global aluminum production roadmap as part of our coverage of the 15 Largest Aluminum Producing Countries In The World. This data shows that there wasn't a single European country in the top five largest aluminum producers, and Chinese aluminum smelter output of 40 metric tons as of 2022 end was greater than the next 14 countries on the list. Therefore, it's natural for the prices to be low, as greater supplies often mean aluminum producers are able to spread costs across a large number of operational units. Global aluminum consumption stood at a strong 65.78 million tons last year, and it is projected to 78 million tons by 2029. Aluminum production requires investment as well, since as opposed to crude oil where the mined product is simply shipped to a refinery, aluminum is not available in its pure form. Instead, the metal is mined by digging up bauxite from roughly 15 meters below the Earth's surface.

Moving towards the corporate side of the industry, few standalone companies operate aluminum mines. Instead, large mining giants such as Rio Tinto Group (NYSE:RIO) typically produce the metal along with other mined products. However, since the market is unsaturated, firms that choose to exclusively focus on aluminum production often see greater cost savings and an enviable control of market share. One such example in the aluminum industry is the American firm Alcoa Corporation (NYSE:AA). Alcoa is one of the oldest companies in the world, which was set up more than a hundred years back in 1886. Its revenue for the four latest quarters sits at $11 billion, but intensely high production costs force the gross margin down to just 6.7%. So, for every $1,000 of aluminum that Alcoa mines, the firm is able to profit from just $67 of product. Its earnings performance has also fluttered recently, as out of the four latest quarters, the firm has beaten analyst EPS estimates in only two. Other pureplay aluminum companies are Kaiser Aluminum Corporation (NASDAQ:KALU) and Constellium SE (NYSE:CSTM).

As for the current state of aluminum business operations, here's what the management of Constellium SE (NYSE:CSTM) had to say during the firm's latest quarterly earnings call:

After a strong first quarter performance, our recordable case rate declined in the second quarter, leading to a rate of 1.9 per million hours worked for the first half of the year. This is a humbling reminder that while we always strive to deliver best-in-class safety performance, we need to constantly maintain our focus on safety to achieve the ambitious targets we have set. It is a never-ending task for our company and one we take very seriously. Turning to our financial results.

Shipments were 398,000 tons, down 6% compared to the second quarter of 2022 due to lower shipments in PARP and AS&I. Revenue of €2 billion decreased 14% compared to last year, as improved price and mix was more than offset by lower shipments and lower metal prices. Remember, while our revenues are affected by changes in metal prices, we operate a pass-through business model, which minimizes our exposure to metal price risk. Our value-added revenue, which reflects our sales, excluding the cost of metal was €785 million, up 11% compared to the same period last year. Our net income of €32 million in the quarter compared to a net loss of €32 million in the second quarter last year. As you can see in the bridge on the top right, adjusted EBITDA of €209 million in the quarter was up 5% compared to last year and is a new quarterly record for the company.

With these details in mind, we decided to take a look at some top aluminum stocks, with Crown Holdings, Inc. (NYSE:CCK), Alcoa Corporation (NYSE:AA), and Apollo Global Management, Inc. (NYSE:APO) ranking the highest.

10 Best Aluminum and Aluminum Mining Stocks To Buy

Kzenon/Shutterstock.com

Our Methodology

To compile our list of the best aluminum and aluminum mining stocks we first made a list of all the companies that either pureplay aluminum firms or work with the metal as part of their broader operations. They were then ranked by the number of hedge fund shareholders as of June 2023.

10 Best Aluminum and Aluminum Mining Stocks To Buy10. Kaiser Aluminum Corporation (NASDAQ:KALU)

Number of Hedge Fund Investors In Q2 2023: 11

Kaiser Aluminum Corporation (NASDAQ:KALU) is an American firm headquartered in Memphis, Tennessee. It makes and sells aluminum products for industrial and engineering use. Its shares are rated Hold on average by analysts which have also penned in a modest $2.28 share price upside based on the average price target.

During Q2 2023, 11 out of the 910 hedge funds part of Insider Monkey's database had held a stake in Kaiser Aluminum Corporation (NASDAQ:KALU). Out of these, the firm's biggest investor is Ken Fisher's Fisher Asset Management since it owns 163,710 shares that are worth $11.7 million.

Along with Alcoa Corporation (NYSE:AA), Crown Holdings, Inc. (NYSE:CCK), and Apollo Global Management, Inc. (NYSE:APO), Kaiser Aluminum Corporation (NASDAQ:KALU) is a top aluminum stock.

9. Century Aluminum Company (NASDAQ:CENX)

Number of Hedge Fund Investors In Q2 2023: 15

Century Aluminum Company (NASDAQ:CENX) is another aluminum products company. It has operations in the U.S. and in Europe. The firm expanded its operations base earlier this year and saw activity in September when a Seattle based investment firm increased its stake in the company by 33%.

By the end of this year's second quarter, 15 hedge funds out of the 910 tracked by Insider Monkey had bought the firm's shares. Century Aluminum Company (NASDAQ:CENX)'s largest hedge fund investor among these is Ken Fisher's Fisher Asset Management through its $21 million stake.

8. Tredegar Corporation (NYSE:TG)

Number of Hedge Fund Investors In Q2 2023: 17

Tredegar Corporation (NYSE:TG) is an aluminum end product company that produces goods that are used in construction. Institutional investors hold almost 70% of the firm's shares, and given any jitters in the economy, the stock can become vulnerable since Tredegar Corporation (NYSE:TG)'s business is tied to the health of electronics production and other industries.

After digging through 910 hedge funds for their June quarter of 2023 investments, Insider Monkey discovered that 17 had invested in Tredegar Corporation (NYSE:TG). Mario Gabelli's GAMCO Investors is the company's biggest stakeholder since it owns $27.4 million worth of shares.

7. BHP Group Limited (NYSE:BHP)

Number of Hedge Fund Investors In Q2 2023: 23

BHP Group Limited (NYSE:BHP) is a global mining giant that engages in aluminum mining through its business divisions. Bullishness for natural resources seems to be on analysts' minds as they have rated the stock as a Strong Buy on average and penned a $7 upside for the shares. However, investment bank Goldman Sachs is going against the tide, as it downgraded the shares to Neutral in a July 2023 analyst note and reduced the price target.

As of June 2023, 23 out of the 910 hedge funds surveyed by Insider Monkey were the firm's investors. BHP Group Limited (NYSE:BHP)s largest shareholder out of these is Ken Fisher's Fisher Asset Management through its $1.1 billion investment.

6. Reliance Steel & Aluminum Co. (NYSE:RS)

Number of Hedge Fund Investors In Q2 2023: 26

Reliance Steel & Aluminum Co. (NYSE:RS) is an American metal products manufacturer that deals in aluminum, copper, and other materials. Keybanc maintained an Overweight rating on the shares in July 2023, and the shares are rated Buy on average.

23 out of the 910 hedge funds part of Insider Monkey's Q2 2023 database had bought Reliance Steel & Aluminum Co. (NYSE:RS)'s shares. Donald Yacktman's Yacktman Asset Management is the biggest investor among these due to its $338 million stake.

Crown Holdings, Inc. (NYSE:CCK), Reliance Steel & Aluminum Co. (NYSE:RS), Alcoa Corporation (NYSE:AA), and Apollo Global Management, Inc. (NYSE:APO) are some best aluminum and aluminum stocks to buy.

Click to continue reading and see 5 Best Aluminum and Aluminum Mining Stocks To Buy.

Most Read from Bloomberg

A term sheet in circulation shows Stanmore Resources Ltd. is seeking to borrow a total of $1.1 billion for its acquisition of the Daunia coal mine, according to people familiar with the matter. The coal producer is also in talks to secure a $350 million bank loan, said the people, who asked not to be named because the matter is confidential.

Stanmore would fund the remainder of the purchase via equity, the people also said. The company declined to comment when contacted by Bloomberg.

Click here for more on the proposed terms

BHP announced earlier this year it planned to divest two of its coal mines in Queensland, Daunia and Blackwater, saying they’d struggle to compete for capital as the company changes tack.

Indonesian mining contractor PT Bukit Makmur Mandiri Utama and Stanmore made initial bids for at least one of them and private credit funds were considering jumbo loans to help with the financing, Bloomberg reported late last month.

Private debt has become an increasingly sought-after funding tool globally, as banks pull back amid a drop in investor risk appetite. Stanmore already relied on this type of lending in 2021 to partially fund its acquisition of BHP’s 80% stake in a coal operation joint venture with Mitsui & Co. in Bowen Basin, Queensland.

For BHP’s Blackwater mine, Bukit Makmur Mandiri Utama is in talks with two banks for a loan of as much as $750 million to back its bid, according to people familiar with the matter.

The Indonesian mining contractor is in separate talks with private credit funds and global banks for an acquisition loan, which would be held at the level of a special purpose vehicle, they said.

–With assistance from Harry Brumpton.

(Writes through to focus on private credit, adds Buma loan reference in final paragraphs)

Most Read from Bloomberg Businessweek

Harmony Gold CEO Steenkamp to retire December 2024

Gold miner may search internally for new CEO

By Felix Njini

NAIROBI, Sept 13 (Reuters) – Harmony Gold Mining boss Peter Steenkamp plans to retire at the end of next year as South Africa's biggest gold producer by volume seeks new growth opportunities mining copper.

Steenkamp, who turns 64 in November, has been at the helm at Harmony since returning in 2016. In 2022, the company extended the veteran gold mining executive's tenure by two years.

Steenkamp will leave around December 2024 and the company has "strong internal candidates to continue what we have built since 2016," spokesperson Jared Coetzer told Reuters.

Steenkamp's pending exit doesn't change the strategy to shift to developing copper assets and looking for deals to grow the company, Coetzer added.

"There are various internal candidates who would have to go through the nomination process and ultimately it would be a board decision," Coetzer said.

Harmony is among South Africa's few remaining gold miners squeezing profits from some of the world's most costly, ageing and deepest gold mines.

It could be "difficult to find outsiders with deep-level gold mining experience" to run the company, analysts at RMB Morgan Stanley said in a note.

The Johannesburg-based producer has shifted focus to developing new gold-copper assets in Australia and Papua New Guinea as profits at home are hit by safety challenges at underground mines, rolling electricity outages and rising crime.

Harmony plans to spend about $600 million to build a new mine at the Eva copper project in Australia it bought last year.

It also plans to advance the Wafi-Golpu copper project in Papua New Guinea, jointly owned with Newcrest Mining, once the country's authorities grant regulatory approvals. (Reporting by Felix Njini Editing by Mark Potter)

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