(Adds quote from Samarco in paragraph 9)

May 31 (Reuters) – Brazilian miner Vale said late on Wednesday night it had entered into a binding deal on the parameters for a planned debt restructuring at Samarco , a joint venture it shares with miner BHP Group .

Vale said it had agreed on the deal with Samarco, BHP Billiton Brasil and certain creditors that hold more than 50% of Samarco's notes and unsecured bank debt.

The entire restructuring plan still needs approval from the bankruptcy court and the creditors.

In a securities filing, Vale said Samarco should emerge from the recovery process with a "lean capital structure" under the terms agreed and that payments to its creditors will be made over time, in line with Samarco's cash flow and ramp-up of operations.

"Samarco's contribution to fund the reparation will be capped from 2024 to 2030 at $1 billion," Vale said, adding that additional contributions from the joint venture would depend on "excess cash flow" it generates.

The remaining reparation balance should be equally shared between Vale and BHP, it said.

Separately, Samarco restructuring director Luiz Fabiano Saragiotto said all parties had made efforts to reach the current agreement, and that "with important concessions, this could allow for a balanced and lasting plan."

Samarco has for years struggled to reach an agreement with its creditors, who rejected Samarco's initial recovery plan in April last year.

Samarco's debt problems stem from the collapse of an iron ore tailing dam in the southeastern city of Mariana, which killed 19 people and severely polluted the Doce River with mining waste. (Reporting by Roberto Samora and Peter Frontini; Writing by Carolina Pulice; Editing by Sarah Morland and Tom Hogue)

May 31 (Reuters) – Brazilian miner Vale said on Wednesday night it had entered into a binding deal on the parameters for a planned debt restructuring at Samarco , a joint venture it shares with miner BHP Group .

Vale said it had agreed the deal with Samarco, BHP Billiton Brasil and certain creditors. (Reporting by Roberto Samora and Peter Frontini; Writing by Carolina Pulice; Editing by Sarah Morland)

Generally speaking the aim of active stock picking is to find companies that provide returns that are superior to the market average. Buying under-rated businesses is one path to excess returns. To wit, the BHP Group share price has climbed 29% in five years, easily topping the market return of 14% (ignoring dividends). On the other hand, the more recent gains haven't been so impressive, with shareholders gaining just 7.5% , including dividends .

Although BHP Group has shed AU$7.1b from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

Check out our latest analysis for BHP Group

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.

Over half a decade, BHP Group managed to grow its earnings per share at 31% a year. This EPS growth is higher than the 5% average annual increase in the share price. So it seems the market isn't so enthusiastic about the stock these days. This cautious sentiment is reflected in its (fairly low) P/E ratio of 7.74.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

earnings-per-share-growth

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. This free interactive report on BHP Group's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of BHP Group, it has a TSR of 116% for the last 5 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's good to see that BHP Group has rewarded shareholders with a total shareholder return of 7.5% in the last twelve months. That's including the dividend. Having said that, the five-year TSR of 17% a year, is even better. The pessimistic view would be that be that the stock has its best days behind it, but on the other hand the price might simply be moderating while the business itself continues to execute. It's always interesting to track share price performance over the longer term. But to understand BHP Group better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for BHP Group (of which 1 is significant!) you should know about.

BHP Group is not the only stock that insiders are buying. 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 Australian exchanges.

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.

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A [sputtering recovery in China](https://www.wsj.com/articles/chinas-youth-unemployment-tops-20-amid-signs-of-stalling-recovery-cea320ef?mod=article_inline) has dragged copper prices to a five-month low, delaying one of the most widely anticipated bull runs in commodity markets.

(Bloomberg) — A major coal port in Australia said vessels bound for China had arrived at the facility this month, adding more evidence of an easing of curbs on sales to the top consuming nation.

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“There are early signs that the informal ban on Australian coal imports to China may be in the process of being removed,” Dalrymple Bay Infrastructure Ltd., which operates the world’s largest metallurgical coal export facility in Queensland, said Monday in a statement.

Coal suppliers including BHP Group Ltd. have resumed exports to China after authorities gave clearance for some purchases to restart after an easing of diplomatic tensions between the two nations. Imports by China, previously a key customer, halted in late 2020 as an informal ban was imposed following disagreements on issues including the origins of coronavirus.

China could import as much as 20 million tons of hard coking coal from Australia this year, producer Coronado Global Resources Inc. said last month.

Dalrymple Bay shipped 53.3 million tons in 2022, with Japan, South Korea, India and Europe accounting for 75% of exports, the company said in its statement.

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A little over a year ago, Melbourne-based BHP Group Ltd., the world’s largest miner, bowed out of the highly publicized bidding war with Australian billionaire Andrew Forrest’s Wyloo Metals Pty. Ltd. for a nickel project in Ontario’s Ring of Fire region.

The tug of war between the two Australian miners over a Canadian asset included multiple bids over almost half a year before Wyloo’s $616.9-million bid in December 2021 led to the takeover of Noront Resources Ltd. — and with it the much talked about Eagle’s Nest project in northern Ontario.

Losing out to Wyloo, however, didn’t discourage BHP on planting more flags in Canada. The company has made a series of alternative investments since bowing out of the Noront auction that haven’t received as much attention, but suggests that BHP may be open to building a battery metals empire in Canada.

“Mergers and acquisition is one lever for growth but not the only lever for growth for us at all,” Rag Udd, BHP’s president of minerals for the Americas, said after the company reported its latest quarterly financials on Feb. 21. “We see Canada as a highly prospective and desirable location to actually making investments,” he added.

Rag Udd, BHP’s president of minerals for the Americas.

BHP is coming off a down year. The company said this week that revenue fell 16 per cent over the final six months of 2022 from the same period in 2021, while profit tumbled 27 per cent. Udd attributed the decline to lower prices of iron ore and copper last year and rising costs. The company’s stock dropped sharply on the news, but recovered, and is now about four per cent higher than year ago.

Still, BHP, like most miners these days, is optimistic. The demand for metals that are crucial in powering batteries and driving the transition to greener energy — primarily lithium, nickel and copper — is on the rise as more countries look to meet their climate goals. Major mining companies such as Teck Resources Ltd., Barrick Gold Corp. and Rio Tinto Ltd. have been involved in building, exploring and buying projects containing these minerals to take advantage of the boom.

Governments also want a piece of the action. Canada, for its part, is attempting to lure miners and automakers to the region through tax credits and funds in order to build its own electric vehicle industry.

We see Canada as a highly prospective and desirable location to actually making investments

Rag Udd, BHP’s president of minerals for the Americas

BHP, which already produces a vast amount of nickel and copper at mines around the world, set up an office for minerals exploration in Toronto about a year-and-half ago. The group has a special focus on metals such as copper and nickel, and the objective is to find Canadian miners with good assets and invest in them.

Over the past year, the Australian miner invested $13.6 million in a copper project run by Vancouver-based Brixton Metals Corp., renewed its exploration alliance with Montreal-based Midland Exploration Inc. and invested $100 million in Vancouver-based Filo Mining Corp., which is developing a copper-gold project on the Argentinean-Chilean border.

These investments aren’t significant, especially for a company the size of BHP, which earned a revenue of about US$65 billion in 2022, Udd acknowledged. One of the reasons BHP has taken a cautious approach to investing in green metals in Canada is because it already runs the Nickel West operations in Australia, which it says is the world’s leading nickel supplier to the battery metals market.

A tonne of nickel powder made by BHP Group sits in a warehouse at its Nickel West division, south of Perth, Australia.

However, Udd said that Canada’s recently announced critical minerals strategy makes it a “very very attractive jurisdiction” for BHP and aligns it with the “company’s priorities moving forward.”

Released in December, Canada’s first significant critical minerals strategy aims to expand exploration, speed up mining projects, tackle labour shortages, and build secure supply chains with allied nations in a bid to build its on electric vehicle industry.

While the strategy comes with a list of 31 minerals that the government has deemed as “critical,” the country will initially prioritize six: lithium, graphite, nickel, cobalt, copper and rare earth elements.

If one of the goals was to attract international investment, then the strategy could be working because Prime Minister Justin Trudeau’s government got BHP’s attention.

“As we are looking to bring new supply to the market quickly, we hope that Canada actually continues to not only focus on the critical minerals strategy but also the efficiency of the regulatory processes associated with that,” said Udd.

Ottawa knows regulation is getting in the way of investment. Jonathan Wilkinson, the natural resources minister, said repeatedly last year that he’s working on making the system more efficient. When he released the critical minerals strategy in December, he acknowledged that permits need to be granted faster, and suggested the federal and provincial governments could conduct reviews concurrently instead of consecutively.

• BHP to start recruiting hundreds to operate potash mine in Saskatchewan

• Rio Tinto invests in early stage copper project amidst next ‘M&A cycle’

• Ottawa to give BHP up to $100 million to cut emissions at Jansen potash project

Of course, BHP’s main focus in Canada currently isn’t on battery metals, but potash, a vital crop nutrient that is also deemed as a critical mineral by the federal government. BHP is currently pressing forward with Jansen, a $7.5-billion project 140 kilometres east of Saskatoon that will be the world’s largest potash mine once completed.

However, judging by BHP’s activities in the last year and Udd’s statements on BHP’s future in Canada, few would be surprised to see the world’s largest miner expand its interests in Canada.

“We are looking to build up on in terms of thematics around decarbonization, electrification and population growth,” Udd said. “We see these as the mega-trends that are going to play out in the next 50 years globally, and we think Canada is well positioned.”

• Email: nkarim@postmedia.com | Twitter: naimonthefield

Listen to Down to Business for in-depth discussions and insights into the latest in Canadian business, available wherever you get your podcasts. Check out the latest episode below:

A look at the day ahead in European and global markets from Ankur Banerjee:

After a sputtering start to the week for the equities market, flash PMI data from Eurozone, UK and Germany will likely give some sort of direction for traders. Investors have put on their risk-off hats so far, with the dollar ascendant on Tuesday, having erased its year to date losses and as Asian equities flirt with six-week lows.

With U.S. markets set to reopen after Monday's holiday, investor focus will be squarely on minutes from the Feb. 1 Federal Reserve meeting, scheduled to be released on Wednesday.

At that meeting, the central bank raised interest rates by 25 basis points and said disinflation was underway. Resilient economic data for the past month has brought back investor fears that the Fed will have to hike more and stay higher for longer.

Minutes from the Reserve Bank of Australia's policy meeting in February showed the board abandoned all thought of pausing rate hikes in the face of sticky inflation and signalled more hikes would be needed in the months ahead.

Meanwhile, Russian President Vladimir Putin was due to make a speech on Tuesday setting out aims for the second year of his invasion of Ukraine. It comes just a day after U.S. President Joe Biden's surprise visit to Ukraine where he walked the streets of Kyiv and promised to stand with Ukraine as long as it takes.

In the corporate world, global miner BHP Group reported a dour first half earnings but pinned hopes on a rebound in demand from China, its biggest customer.

Europe's largest bank HSBC Holdings unveiled plans for a special dividend and share buybacks as rising interest rates swelled net interest income.

Earnings from Walmart later in the day will shed light on American consumers' buying habits in the face of rising expenses.

Key developments that could influence markets on Tuesday:

Economic events: Flash PMIs for Germany, France, UK and Eurozone

(Reporting by Ankur Banerjee; Editing by Sam Holmes)

(Bloomberg) — China’s reopening should help stabilize global commodities demand, according to the world’s top miner, but the prediction comes with caveats.

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BHP Group Ltd. reported a drop in first-half profit after the strict virus policies in its largest customer derailed demand for key commodities including iron ore, its biggest revenue earner. Beijing’s swift exit from Covid Zero that began in December is now breeding optimism that consumption will recover and offset slowing growth elsewhere in the world.

Raw materials from iron ore to copper and coking coal have rallied in anticipation of the return of Chinese buyers, although an extended Lunar New Year holiday and high stockpiles have dented hopes of an immediate lift to consumption.

“China has been buoyed by the green shoots we’ve seen since the start of this calendar year,” Chief Executive Officer Mike Henry told an earnings call. “So there’s a lot there that’s giving us confidence that we will see an acceleration in the Chinese domestic economy.”

However, the risk remains that China could fare worse than expected if the global downturn hits demand for its products. “If we see a sharper pullback in the US and Europe, that will have a bigger impact on Chinese exports,” he said.

Demand for iron ore from China’s vast steel industry is now expected to improve, BHP said in its earnings report, although it warned that the impact on profitability at steel mills, which affects the premium paid for higher grade ore, remains uncertain.

Beijing has also established a new state-owned company, China Mineral Resources Group, to consolidate purchases on behalf of its largest steelmakers. Henry said the development, designed to improve China’s leverage in the $160 billion trade, is “bringing an added dimension to the market” but downplayed concerns it would give buyers too much power.

In the medium term, BHP said Chinese consumption of iron ore will fall from current levels as steel output plateaus and more scrap is used. China’s steel production has been in decline for the past two years after the government moved to cut emissions and rein in its heavily indebted property sector, the biggest source of demand.

For copper, the miner’s next biggest earner, demand growth is expected to be modest, with improvements in China offsetting weakness in the developed world. More broadly, “the electrification mega-trend” is likely to be major tailwind for consumption of those metals like copper and nickel that are crucial to the transition away from fossil fuels, it said.

The Week’s Diary

Tuesday, Feb. 21

• Nothing major scheduled

Wednesday, Feb. 22

• China Photovoltaic Industry Forum in Beijing

• CCTD’s weekly online briefing on China’s coal market, 15:00

Thursday, Feb. 23

• EARNINGS: HKEX

Friday, Feb. 24

• China weekly iron ore port stockpiles

• Shanghai exchange weekly commodities inventory, ~15:30

On The Wire

Russian exports of discounted crude and fuel oil to China have jumped to record levels as the re-opening of the world’s biggest energy importer gathers pace after the dismantling of Covid Zero.

Something strange is happening in the world’s most polluting industry.

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By Himanshi Akhand and Melanie Burton

BENGALURU/MELBOURNE (Reuters) – Australia's iron ore giants BHP Group, Rio Tinto and Fortescue are set to report a steep drop in their earnings, which is set to compress their payouts to shareholders, after China's COVID lockdown drove down iron ore prices.

Earnings at Rio Tinto and BHP Group are seen declining 48% and 28%, respectively, for the six months to December 2022, while Fortescue's half-year earnings are set to slide about 16%, based on estimates from Visible Alpha and Vuma Financial.

The miners are expected to offer a mixed outlook for 2023, amid uncertainty over the strength of China's recovery following the lifting of its strict COVID-19 curbs.

"We haven't seen too much hard data from China just yet, but I think there's enough for the miners to be more optimistic – cautiously so," said Adrian Prendergast, an analyst at Morgans Financial in Melbourne.

The companies are also facing higher materials and fuel costs and a dearth of skilled workers that could impinge on their expansion projects.

Average realised prices for iron ore fell sharply in the six months to December, hitting earnings.

Dividend payouts are expected to fall, undermined by the weaker earnings and a push by the major diversified miners to fund growth, be it through building their own projects or through acquisitions, analysts at Goldman Sachs wrote in a note.

Buyout activity has been ramping up in the mining sector, as evidenced by Rio's recent $3.3 billion takeover of Canada's Turquoise Hill to gain control of its Mongolian copper mine, and BHP's A$9.6 billion offer for copper and gold producer OZ Minerals.

BHP, which will report its first-half results on Feb. 21, is expected to record attributable profit from total operations of $6.82 billion, down from $9.44 billion.

First-half net profit at Fortescue, reporting on Feb. 15, is seen declining to $2.34 billion from $2.78 billion. BHP and Fortescue report on a July-June financial year.

Underlying half-year profit at Rio Tinto, which reports on a calendar year cycle, is seen declining 48% to $4.77 billion from $9.21 billion. Rio will report on Feb. 22.

(Reporting by Himanshi Akhand in Bengaluru and Melanie Burton in Melbourne; Editing by Sonali Paul)

MELBOURNE, Jan 31 (Reuters) – New South Wales is set to finalise an order by mid-February that will require all mining firms in Australia's biggest coal exporting state to reserve as much as 10% of their output for domestic supply.

A Department of Planning and Environment spokesperson said the government would issue final directions after talks with miners.

"The draft revised directions allow suppliers the option to provide coal from their own production or to strike an agreement from another supplier to meet their obligations under the directions," the spokesperson said.

The updated plan, disclosed last week, is designed to keep a lid on coal prices and drive down household power bills. The state last week had planned to issue the expanded order by the end of January, but has faced resistance from miners.

The department did not say how many tonnes of coal will be required.

Whitehaven Coal Chief Executive Paul Flynn has said the government appeared to be looking to secure around 3 million to 5 million tonnes, but the company was pressing the state to explain how that shortfall estimate had been determined.

Directions issued in December required a dozen coal mines that supply power plants in New South Wales to fill a shortfall in supply at a capped price of A$125 a tonne – well below the export price currently at about $265 a tonne – under a deal with the federal government.

The mines are mainly owned by Glencore Plc, Peabody Energy, New Hope Corp and Thailand's Banpu PCL .

The state now wants to spread the requirement to all the state's coal producers, including those that export all of their output, including BHP Group, Whitehaven Coal and Yancoal Australia.

BHP has said the new policy could affect its plan to keep its Mt Arthur coal mine, the state's largest single coal mine, open until 2030. (Reporting by Sonali Paul; Additional reporting by Melanie Burton; Editing by Edwina Gibbs)

(Bloomberg) — BHP Group Ltd. made an improved A$9.6 billion ($6.4 billion) offer to acquire copper producer OZ Minerals Ltd. as the world’s top miner seeks more exposure to rising demand from clean energy and electric cars.

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OZ Minerals will recommend shareholders vote in favor of the A$28.25 a share offer, the Adelaide, Australia-based company said Friday, after rejecting an earlier A$25 per share bid in August. The proposed acquisition would be BHP’s largest since the $12.1 billion purchase of Petrohawk Energy Corp. in 2011.

Miners across the globe are hungry for copper assets to add a metal that’s regarded as critical to the energy transition due to its use in electricity networks, renewable energy and electric vehicles. Demand for copper is set to jump 58% by 2040, according to BloombergNEF, and BHP is looking to consolidate its position as one of the world’s largest producers.

BHP has said so-called future facing metals copper and nickel, as well as fertilizer ingredient potash, are key to the company’s growth as demand plateaus for iron ore, its most important commodity, and the world moves away from fossil fuels. BHP has reduced its coal business in recent years, and sold its entire oil and gas business to Woodside Energy Group this year.

“The combination of BHP and OZL’s assets, skills and technical expertise provides a unique opportunity not available under separate ownership,” BHP Chief Executive Officer Mike Henry said.

OZ Minerals shares rose as much as 4.5% to A$27.49, the highest level since April, and traded at A$27.38 as of 12:13 p.m. in Sydney on Friday.

The latest offer is 49% above the OZ Minerals share price on Aug. 5, the trading session before BHP made its first bid. BHP will now conduct due diligence and the offer will be its “best and final” proposal, the company said.

OZ Minerals, which has operations adjacent to BHP’s huge Olympic Dam mine in South Australia, would add around 7% to BHP’s annual copper production. The target also has mines in Brazil and a key nickel project in Western Australia.

“BHP’s revised proposal is a clear reflection of OZ Minerals’ unique set of highly strategic, quality assets in quality jurisdictions and an enviable multi-generational growth pipeline of copper and nickel assets in strong demand due to global electrification,” OZ Minerals Chief Executive Officer Andrew Cole said.

The offer came as Rio Tinto Group, BHP’s biggest competitor, hit another roadblock in its bid to take full control of Turquoise Hill, a Canadian company that has what would be one of the world’s largest copper mines in Mongolia.

(Adds shares in sixth paragraph. A previous version of the story corrected the currency in headline.)

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(Bloomberg) — Oz Minerals Ltd. has requested a trading halt pending an announcement in relation to a potential change-of-control transaction, three months after the copper miner rejected a A$8.4 billion ($5.7 billion) bid by BHP Group Ltd.

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The securities will remain in the trading halt until the commencement of normal trading on Friday, or when the announcement is released to the market, Oz Minerals said in a statement to the Australian Securities Exchange on Wednesday.

BHP was the likely bidder, but it’s also possible it could be a new entrant because the mining giant hadn’t entered a trading halt, Shaw and Partners analyst Peter O’Connor said in a note. The bidder would need to offer “A$30 a share or close to it,” he said.

BHP’s initial offer for Oz Minerals was for A$25 a share. The company’s shares closed at A$26.30 in Sydney on Tuesday.

A spokesperson from BHP declined to comment.

See also: Oz Minerals Said to Seek A$10 Billion in Potential Sale

BHP, which hived off its oil and gas assets this year, is seeking growth in commodities tied to trends including low-emissions transport and clean energy — particularly copper for renewables and nickel for lithium-ion batteries. The mining giant is also pouring billions of dollars into a giant new potash mine in Canada to enter the fertilizer sector.

(Updates with comment from analyst in 3rd paragraph.)

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(Bloomberg) — Chilean regulatory uncertainties that have held up some investments in the biggest copper-producing nation are dissipating, according to BHP Group, the world’s top mining company.

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Earlier this month, Chileans overwhelmingly rejected a proposed new constitution that signaled tougher rules to protect the environment and local communities. Authorities are showing willingness to receive feedback on planned tax hikes, BHP President Minerals Americas Ragnar Udd said Tuesday.

“The uncertainties are easing,” he said in an interview from the Perumin conference in Arequipa, Peru. “We’re starting to see a bit more moderated conversations around the constitution in terms of what that’s going to look like one way or the other.”

BHP, which operates the world’s biggest copper mine in Chile, has dangled $10 billion to develop more resources in the country if those uncertainties are finally resolved. Huge investments are needed to help boost global supply at a time when demand for the wiring metal is set to rise as the world turns away from fossil fuels.

While it’s up to Chileans to decide whether they want a regulatory environment that remains competitive with other mining nations, people do recognize the importance of a stable economy, Udd said.

“The conversations I’ve had would suggest that there is a sensation that the reality is that Chile has an important role to play in the world and some of the changes that we see going forward probably won’t be as extreme as we’ve seen in the past,” he said.

Chile’s push for a bigger share of mining profit to address inequalities are part of the copper market’s growing supply-side challenges. Deposits around the world are getting trickier and pricier to find and develop, while there’s heightened scrutiny of environmental and social issues. Surging inflation, rising interest rates and global recession fears that have brought down commodity prices in recent months are adding to investment barriers.

Inflation is washing through mining projects, “to the point that I think that will create another obstacle in terms of how people think about investing for the next period of time,” Udd said.

“Organic growth is challenged in the current environment,” he said. “We for a second though are not backing off of exploration, nor are we backing off from early-stage entries or innovation. In fact, this sort of environment creates a possibility in terms of what can you unlock with what you’ve got.”

These days, BHP is focusing more on technologies such as leaching that can boost output without incurring huge upfront costs. It’s also taking a “more proactive stance” on early-stage entry, Udd said.

The company’s team in Toronto continues to scour for deal opportunities in nickel, although that hunt isn’t restricted to early-stage targets. “This is not an ‘or’ conversation, this is an ‘and’ conversation,” he said. “If it adds value, we will pursue it.”

With regards to BHP’s interest in Sydney-listed OZ Minerals Ltd., Udd said a non-binding indicative offer has been made. “If Oz would like to talk to us, we’re very receptive to that.”

In the case of its smallest mine in Chile, Cerro Colorado, BHP is exploring alternatives to continue operating beyond 2023, when current permits expire. A solution probably would include the use of seawater, he said. “That’s a process and studies we’re working through at this point.”

Udd wouldn’t be drawn in to making copper-price predictions in such a volatile market. Like most in the industry, he offered an upbeat outlook for the medium and longer term as decarbonization drives demand for the wiring metal and the industry struggles to keep pace. But with the current slowdown and some new supply coming on stream, near-term prospects are far less favorable, although BHP is still relatively bullish on China.

“It’s a volatile world and probably will continue to be for at least the next couple of years,” he said “We just need to adjust to that, recognizing though that there’s a longer term goal that we can be working on.”

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©2022 Bloomberg L.P.

For Immediate Release

Chicago, IL – September 23, 2022 – 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: BHP Group Ltd. BHP, United Parcel Service, Inc. UPS, Adobe Inc. ADBE, EOG Resources, Inc. EOG, and América Móvil, S.A.B. de C.V. AMX.

Here are highlights from Thursday’s Analyst Blog:Top Analyst Reports for BHP Group, UPS, Adobe and Others

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 BHP Group Ltd., United Parcel Service, Inc. and Adobe Inc. 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 >>>

BHP Group shares have declined -7% over the past year against the Zacks Mining – Miscellaneous industry’s decline of -15.5% and the S&P 500 index's -16.1% decline. The outlook for BHP's commodities remains favorable, notwithstanding near-term macroeconomic headwinds, particularly the uncertain outlook for China.

The recent pullback in iron ore prices nothwithstanding, the Zacks analyst expects the commodity to regain ground in the medium to long run on pent-up demand in the automotive sector, infrastructure and the housing market. Copper and nickel prices will also be fueled by demand for electric vehicles.

BHP will benefit from its efforts to make operations more efficient through smart technology adoption across the entire value chain. Investment in growth projects with a particular focus on commodities like copper, nickel and potash will aid growth as well. The company’s iron ore production guidance for fiscal 2023 is 249-260 Mt. The midpoint of the range indicates a 1% increase from the prior-year tally.

(You can read the full research report on BHP Group here >>>)

UPS shares have handily outperformed rival FedEx over the past year (down -9.2% vs. -33.2%) despite being faced with most of the same macroeconomic challenges.

Even though economies are reopening, the urge for online shopping refuses to relent among consumers. High shipping rates also bode well for UPS. Moreover, its strong free cash flow generating ability pleases us and supports UPS' shareholder-friendly activities.In first-half 2022, UPS generated a free cash flow of $6,895 million compared with $6,804 million in first-half 2021. UPS paid out dividends worth $3,437 million in 2021, up 1.9% year over year. UPS aims to reward its shareholders with $8.2 billion in 2022, through dividends ($5.2 billion) and share buybacks ($3 billion).

(You can read the full research report on United Parcel here >>>)

Adobe shares have declined -55.2% over the past year against the Zacks Computer – Software industry’s decline of -27.5%, with the stock really losing ground following the weak(ish) quarterly report when it guided lower. The Figma acquisition has also weighed on the stock lately, as the market sees the purchase price to be on the high side.

Adobe's Creative Cloud, Document Cloud and Adobe Experience Cloud products drove the top-line growth in the quarterly report. Further, rising subscription revenues and solid momentum across the mobile apps remained major positives. Growth in emerging markets, robust online video creation demand and solid adoption of Acrobat are tailwinds.Also, continued key customer wins of the company are contributing well. We remain optimistic about Adobe’s market position, compelling product lines, continued innovation, strategic acquisitions and solid adoption of cloud applications.

(You can read the full research report on Adobe here >>>)

Other noteworthy reports we are featuring today include EOG Resources, Inc., and América Móvil, S.A.B. de C.V.

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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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report America Movil, S.A.B. de C.V. (AMX) : Free Stock Analysis Report BHP Group Limited Sponsored ADR (BHP) : Free Stock Analysis Report United Parcel Service, Inc. (UPS) : Free Stock Analysis Report EOG Resources, Inc. (EOG) : Free Stock Analysis Report Adobe Inc. (ADBE) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research

Thursday, September 22, 2022The 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 BHP Group Limited (BHP), United Parcel Service, Inc. (UPS) and Adobe Inc. (ADBE). 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 >>>BHP Group shares have declined -7% over the past year against the Zacks Mining – Miscellaneous industry’s decline of -15.5% and the S&P 500 index's -16.1% decline. The outlook for BHP's commodities remains favorable, notwithstanding near-term macroeconomic headwinds, particularly the uncertain outlook for China.

The recent pullback in iron ore prices nothwithstanding, the Zacks analyst expects the commodity regain ground in the medium to long run on pent-up demand in the automotive sector, infrastructure and the housing market. Copper and nickel prices will also be fueled by demand for electric vehicles.  BHP will benefit from its efforts to make operations more efficient through smart technology adoption across the entire value chain. Investment in growth projects with a particular focus on commodities like copper, nickel and potash will aid growth as well. The company’s iron ore production guidance for fiscal 2023 is 249-260 Mt. The midpoint of the range indicates a 1% increase from the prior-year tally.(You can read the full research report on BHP Group here >>>)UPS shares have handily outperformed rival FedEx over the past year (down -9.2% vs. -33.2%) despite faced with most of the same macroeconomic challenges.

Even though economies are reopening, the urge for online shopping refuses to relent among consumers. High shipping rates also bode well for UPS. Moreover, its strong free cash flow generating ability pleases us and supports UPS' shareholder-friendly activities.In first-half 2022, UPS generated a free cash flow of $6,895 million compared with $6,804 million in first-half 2021. UPS paid out dividends worth $3,437 million in 2021, up 1.9% year over year. UPS aims to reward its shareholders with $8.2 billion in 2022, through dividends ($5.2 billion) and share buybacks ($3 billion).(You can read the full research report on United Parcel here >>>)Adobe shares have declined -55.2% over the past year against the Zacks Computer – Software industry’s decline of -27.5%, with the stock really losing ground following the weak(ish) quarterly report when it guided lower. The Figma acquisition has also weighed on the stock lately, as the market sees the purchase price to be on the high side.

Adobe's Creative Cloud, Document Cloud and Adobe Experience Cloud products drove the top-line growth in the quarterly report. Further, rising subscription revenues and solid momentum across the mobile apps remained major positives. Growth in emerging markets, robust online video creation demand and solid adoption of Acrobat are tailwinds.Also, continued key customer wins of the company are contributing well. We remain optimistic about Adobe’s market position, compelling product lines, continued innovation, strategic acquisitions and solid adoption of cloud applications.(You can read the full research report on Adobe here >>>)Other noteworthy reports we are featuring today include The Charles Schwab Corporation (SCHW), EOG Resources, Inc. (EOG), and América Móvil, S.A.B. de C.V. (AMX).Sheraz MianDirector of ResearchNote: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>

Today's Must Read

BHP Group (BHP) Bets on Operation Efficiency Amid High Costs

Dividends & Buybacks Boost UPS' Prospects Despite Cost Woes

Adobe (ADBE) Rides on Growing Adoption of Cloud Applications

Featured Reports

Strategic Acquisitions Aid Schwab (SCHW) Amid Cost ConcernsPer the Zacks analyst, while Schwab's inorganic growth initiatives and other revenue diversification efforts will aid profits, it might lead to higher costs, thus hurting the bottom line to an extent.

EOG Resources (EOG) Banks On Oil-Rich Delaware Basin AssetsThe Zacks analyst believes that EOG Resources' 6,620 net undrilled premium locations in the Delaware basin will drive oil production growth. However, rising lease and well expenses are concerning.

America Movil (AMX) Benefits from Increasing Subscriber BasePer the Zacks analyst, America Movil's performance is gaining from increased broadband client base. However, stiff competition and the firm's high leverage remain concerns.

New Product Development, Wide Market Reach Aid Eaton (ETN)Per the Zacks analyst Eaton's operations in 175 countries across the world and development of new products through ongoing R&D investments will continue to drive demand and boost profitability.

Moderna's (MRNA) Dependence on COVID-19 Vaccine Sales A WoeThough Moderna's COVID vaccine sales have significantly boosted its cash resources, the Zacks Analyst is concerned since the company's other pipeline candidates are years away from commercialization.

Robust Digital Sales Aid Walgreens (WBA) Amid High CostsThe Zack analyst is encouraged by Walgreens' (WBA) improved online growth momentum led by strong digital sales in the United States. Yet, mounting expenses weigh on the company's bottom line.

Solid Project Execution Aids Quanta (PWR) Amid Project DelaysPer the Zacks analyst, Quanta benefits from solid project execution strategy and three-pronged growth plan. Yet, project variability and elevated consumables costs due to supply-chain disruptions ail.

New Upgrades

Paylocity Holding (PCTY) Benefits From Growing Customer BasePer the Zacks Analyst, Paylocity Holding is benefiting from its differentiated employee strategy, comprehensive product offerings and on-demand pay facility, that are helping it win new customers.

RBC Bearings (ROLL) Rides on Industrial Segment StrengthPer the Zacks analyst, strong performance of the Industrial segment owing to strength in semiconductor, mining, energy, and general industrial end markets, supports RBC Bearings' growth.

Triton (TRTN) Benefits From Dividends & Share RepurchasesThe Zacks analyst likes the shareholder-friendly measures adopted by Triton. Gradual increase in trade volumes and container demand also bode well for the company.

New Downgrades

Soft Comps Performance to Hurt Children's Place (PLCE) SalesPer the Zacks analyst, persistent of soft comps performance may hurt Children's Place sales. The company expects a low-double-digit decline in comps in both the third quarter as well as fiscal year.

Rising SG&A Expenses are a Concern for Wolverine (WWW)Per the Zacks analyst, rise in SG&A costs is a concern for Wolverine. Adjusted SG&A expenses jumped 13% to $228.5 million due to higher variable costs in the second quarter of 2022.

Exposure to Cat Loss, Rising Costs Ail Cincinnati (CINF)Per the Zacks analyst, Cincinnati Financial's exposure to catastrophe events induces underwriting volatility while rising costs weigh on margin, in turn both affecting profitability.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report America Movil, S.A.B. de C.V. (AMX) : Free Stock Analysis Report BHP Group Limited Sponsored ADR (BHP) : Free Stock Analysis Report United Parcel Service, Inc. (UPS) : Free Stock Analysis Report The Charles Schwab Corporation (SCHW) : Free Stock Analysis Report EOG Resources, Inc. (EOG) : Free Stock Analysis Report Adobe Inc. (ADBE) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research

By Ambar Warrick

Investing.com– Major Australian mining stocks tumbled on Wednesday after Rio Tinto CEO Jakob Stausholm warned that copper prices are likely to face short-term pressure from steep inflation and supply chain disruptions.

Shares of BHP Group Ltd (ASX:BHP) and Rio Tinto Ltd (ASX:RIO), the two largest miners in the country, sank 2.6% and 3.1%, respectively. The two are highly exposed to the copper market, although BHP’s sales of the red metal are greater.

Smaller copper miners Newcrest Mining (ASX:NCM) and OZ Minerals Ltd (ASX:OZL) sank 2.9% and 1.1%, respectively.

Speaking to Bloomberg, Stausholm said that the aftereffects of the COVID-19 pandemic were still disrupting global supply chains, and that inflation trending at 30 to 40-year highs was likely to pose a challenge.

Stausholm’s comments come amid a deep decline in copper prices this year, as COVID-related disruptions in China, the world’s largest copper consumer, severely hurt demand. Elevated inflation and high energy prices have also disrupted industrial activity in Europe and the United States.

Rio Tinto, the world's second-largest miner, logged a drop in its profit for the first half of the year as weakening demand in China dented metal prices. The company also recently agreed to a $3.3 billion buyout of Canadian partner Turquoise Hill Resources (TSX:TRQ), giving it direct ownership of the massive Oyu Tolgoi copper mining project in Mongolia.

Stausholm said he expects growth to pick up eventually in China, given that it isn’t facing the same inflationary pressures as other countries. He also expressed confidence in copper’s long-term prospects, driven by a transition to low-carbon energy sources.

Copper prices may also take some support in the near term from a strike in Chile’s Escondida, the largest copper mine in the world. A worker’s union at the mine, which is owned by BHP, recently voted to begin work stoppages from this month.

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Investors with an interest in Mining – Miscellaneous stocks have likely encountered both BHP (BHP) and Wheaton Precious Metals Corp. (WPM). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

BHP and Wheaton Precious Metals Corp. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that BHP likely has seen a stronger improvement to its earnings outlook than WPM has recently. But this is just one factor that value investors are interested in.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

BHP currently has a forward P/E ratio of 8.22, while WPM has a forward P/E of 25.17. We also note that BHP has a PEG ratio of 2.74. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. WPM currently has a PEG ratio of 5.03.

Another notable valuation metric for BHP is its P/B ratio of 1.57. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, WPM has a P/B of 2.28.

Based on these metrics and many more, BHP holds a Value grade of A, while WPM has a Value grade of D.

BHP stands above WPM thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BHP is the superior value option right now.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report BHP Group Limited Sponsored ADR (BHP) : Free Stock Analysis Report Wheaton Precious Metals Corp. (WPM) : Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research

(Bloomberg) — Woodside Energy Group Ltd., Australia’s biggest oil and gas producer, said first-half profit soared more than fivefold on the back of higher prices and the takeover of BHP Group Ltd.’s energy assets.

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Net income for the six months through June 30 rose 417% to $1.64 billion as the average realized price more than doubled from a year earlier to $96.40 a barrel of oil equivalent, the Perth-based company said Tuesday. The completion of the integration of BHP’s petroleum business in June also helped lift production by 19% to 55 million boe.

Woodside has faced investor and activist scrutiny over its increased contribution to climate change following the all-share takeover of BHP’s petroleum assets, which made it Australia’s largest energy company and one of the world’s biggest liquefied natural gas suppliers. The company has used the global energy crunch to defend its decision to continue to invest in production such as the Scarborough project, which is set to supply its first LNG cargo in 2026.

“The upheavals in global and Australian energy markets witnessed over the course of the past six months have shone a spotlight on on the importance of gas in the world energy mix and underscores our confidence in the longer-term demand outlook for gas, which makes up 70% of Woodside’s portfolio,” Chief Executive Officer Meg O’Neill said in a statement.

The result was “in-line to marginally better than expectations,” Citigroup Inc. analysts Paul McTaggart and Tom Wallington said in a note. Price volatility and geopolitical tension are among key risks for the company, along with potential cost blowouts in new oil and gas projects, they said.

Woodside said it would pay a half-year dividend of $1.09 a share, more than three times last year’s level. The company’s shares gained as much as 3.8% in Sydney on Tuesday to their highest level since July 2019.

(Updates with analyst comment, share price from fourth paragraph)

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©2022 Bloomberg L.P.

Meg O’Neill, chief executive officer and managing director at Woodside Energy Group Ltd., discusses first half earning, the business strategy in Asia and her outlook for the gas sector. Woodside, Australia’s biggest oil and gas producer, said first-half profit soared more than fivefold on the back of higher prices and the takeover of BHP Group Ltd.’s energy assets. O’Neill speaks on Bloomberg Television.

(Bloomberg) — Australian mining giant BHP Group should “proactively advocate” for stronger climate policy, according to a new shareholder resolution lodged by an activist investor group.

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The resolution, lodged by the Australasian Centre for Corporate Responsibility and sponsored by at least 100 BHP shareholders, calls on the company to look beyond its own business activities and take an active role in promoting Australian government policies.

The company should help lobby for a new emissions trading mechanism and for phasing out fossil fuel subsidies, and back more rigorous measurement of methane emissions from coal mines, the resolution said. Those calls go further than previous ones, which focused more narrowly on BHP’s own climate policy and its membership in pro-fossil fuel industry associations.

Methane-Spewing Coal Mines Are Climate Test for Australia PM

“Since 2020, BHP has been telling its shareholders that limiting warming to 1.5 degrees Celsius is the best outcome for the company,” Harriet Kater, the ACCR’s Climate Lead, said in a statement. “BHP needs to move beyond its industry associations by positively advocating for the ambitious policy needed to get Australia on track for a 1.5 degrees Celsius pathway.”

The resolution calls on BHP to lobby for policies that would support a “global green iron and steel industry.” The company, a major exporter of both iron ore and metallurgical coal, has vested interests in emissions-intensive steelmaking processes.

“BHP is Australia’s largest company with huge political influence and a massive opportunity to align business interests and policy with a safe climate,” Kater said.

A separate resolution, also lodged by the ACCR, demands BHP include “climate sensitivity analysis” in its reporting that covers all commodities and have a scenario “aligned with limiting warming to 1.5 degrees Celsius.”

Investors will vote on the resolution at the company’s next annual shareholder meeting, BHP said in a statement. The date for the meeting is yet to be announced. The company didn’t immediately respond to a request for comment.

The ACCR has lodged numerous climate-related shareholder resolutions with BHP, including a landmark 2019 resolution calling it to rescind membership of industry groups that lobby against climate policy, which was backed by 27% of shareholders.

©2022 Bloomberg L.P.

(Reuters) – BHP Group shareholders have sought inclusion of climate sensitivity analysis in financial statements from 2023, and requested consistency on climate policy, the world's biggest listed miner and an advocacy firm said on Tuesday.

The demands form a part of resolutions submitted to BHP by the Australasian Centre for Corporate Responsibility (ACCR) on behalf of shareholders, asking the miner to "proactively advocate for Australian policy settings that are consistent with the Paris Agreement's objective of limiting global warming to 1.5°C."

Shareholders also requested that from fiscal 2023, notes to BHP's financial statements show a climate sensitivity analysis, including a scenario aligned with limiting warming to 1.5°C.

The resolutions come as companies globally face pressure to adopt climate plans, with votes being closely watched even if the resolutions are non-binding. BHP targets net zero emissions by 2050, but it has faced pushbacks from shareholders on concerns that some of its long-term plans lack detail.

On its part, the miner has also stopped short of setting a target in view of uncertainty over how technology will develop.

"BHP remains a member of industry associations that have a toxic influence on Australia's climate policy. This resolution does not let BHP off the hook from also having to constrain the advocacy of those associations," said Harriet Kater, Climate Lead (Australia) at ACCR.

"BHP needs to move beyond its industry associations by positively advocating for ambitious policy," they said.

The resolutions will be put forth for consideration at BHP's 2022 annual general meeting.

(Reporting by Harish Sridharan in Bengaluru; editing by Uttaresh.V)

(Bloomberg) — The latest talks over a multibillion-dollar settlement for a 2015 mining disaster failed to yield a deal, with Brazilian officials signaling the two sides are still far apart with time running out.

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“We don’t have an agreement and no perspective that we’ll have one,” Minas Gerais State Planning Secretary Luisa Barreto said in an interview Wednesday after a new round of conversations in Brasilia with representatives of the Samarco iron ore mine and its owners Vale SA and BHP Group.

Without saying how much the companies are offering, Barreto said their proposal falls short of the required environmental and social compensation for a tailings dam collapse that killed as many as 19 people and contaminated waterways in two states. Minas Gerais Attorney General Jarbas Soares Jr. said on Twitter that authorities won’t return to the negotiating table unless there’s a “minimally worthy” new offer.

The companies previously offered 52 billion reais ($10 billion), people with knowledge of the matter said earlier this month. That compares with a 155 billion-real public civil action for reparation.

Brazil’s Supreme Court President Luiz Fux has been acting as mediator in the renegotiation process after an initial arrangement failed to address many of the needs, with allegations of shortfalls in the foundation created to manage payments.

Fux has committed to resolving the case before stepping down on Sept. 9 in an attempt to give affected communities a clear framework for reparations and replace other lawsuits. After that, authorities would undertake the necessary measures to obtain reparations, Barreto said, without elaborating.

Samarco, Vale and BHP said they remain committed to repairing the damage caused by the dam collapse, and to the negotiation process. BHP said the Renova Foundation, which was created to compensate for and repair damages, has disbursed 23 billion reais and provided aid for more than 389,000 people.

Samarco has been under bankruptcy protection since April 2021 as it seeks an agreement with creditors.

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©2022 Bloomberg L.P.

BHP said it would return a record amount of cash to investors as surging coal prices helped the world’s biggest miner deliver a 26 per cent increase in annual profits. BHP said shareholder returns were close to $36bn, including the shares in Woodside Petroleum given to its shareholders in exchange for the sale of the miner’s petroleum division. The bumper payout concludes a transformational year for BHP in which the company spun out its oil and gas operations, unified its share structure in Australia and approved development of a huge potash project in Canada.

(Bloomberg) — BHP Group, the world’s biggest miner, unveiled a record profit on gains in prices of commodities from coal to nickel, and offered some optimism on Beijing’s efforts to reboot Chinese growth and stabilize the ailing property sector.

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China’s infrastructure and automotive sectors are “already responding to policy support,” although a rebound in housing activity is expected to take longer, the producer said.

Here are the company’s key views on global growth and its key commodity markets:

Global Growth

On China, BHP expects demand to improve in fiscal 2023, although it also nodded to lingering risks from Covid-19 lockdowns and the deep slump in construction. The world’s No.2 economy will be a source of stability in the coming year and “perhaps something much more than that” if property activity recovers.

The company flagged weaker growth in other key regions stemming from geopolitics and Covid-19. “This is particularly evident in advanced economies, as central banks pursue anti-inflationary policy and Europe’s energy crisis is an additional source of concern,” BHP said.

Steel

Though there should be a steady improvement in China’s demand, a “slower than expected rebound in construction post Covid-19 lockdowns has dampened sentiment across the steel value chain,” BHP said. Elsewhere in the world, profitability for steelmakers is also declining on weaker demand and markets are likely to remain under pressure this fiscal year as the macroeconomic climate softens.

Iron Ore

The steel-making ingredient is likely to remain in surplus through fiscal year 2023, BHP said, noting stronger supply from big miners and more competition from scrap. Key near-term uncertainties are the pace of steel end-use demand recovery in China, disruptions to seaborne supply, and Chinese steel output cuts. Looking further, BHP said Chinese steel production and iron ore demand will plateau in the mid-2020s.

Copper & Nickel

As always, BHP flagged the long-term prospects of these metals, given their exposure to the “electrification mega-trend”. But immediate prospects are more mixed. The miner sees both metals moving out of deficit conditions as supply improves, particularly for nickel, and as demand outside China worsens, particularly for copper. On copper: “We believe mine supply and scrap collection will grow in the next few years, covering near-term demand growth.”

Coking Coal

After touching record highs, prices for coal used in steel-making face uncertainty over China’s import policy and Russian exports. The key seaborne supply region of Queensland has become “less conducive to long-life capital investment” after announcing plans to raise royalties on producers, BHP said. The fuel will still be used in blast-furnace steel-making for decades, supporting long-term demand, the producer said.

Thermal Coal

Energy coal also broke price records as trade flows were redirected from Asia to Europe as a result of curbs on Russian exports and on gas-to-coal switching as LNG prices spiked, BHP said. Over the longer-term, total primary energy derived from coal — both for power and other uses — is expected to be challenged, particularly under deep decarbonization scenarios where demand is expected to decline, BHP said.

Potash

Prices experienced gains on strong demand and worries over a loss of supply from Belarus and Russia, which account for about 40% of global output. The crop nutrient “stands to benefit from the intersection of numerous global mega-trends: rising population, changing diets and the need for the sustainable intensification of agriculture on finite arable land,” BHP said.

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©2022 Bloomberg L.P.

By Ambar Warrick

Investing.com– Asian stocks rose on Tuesday as investors bet that China would roll out more stimulus measures to improve economic growth, while the Australian benchmark was supported by BHP after the miner logged a record annual profit.

China’s bluechip Shanghai Shenzhen CSI 300 index edged 0.1% higher, while the Shanghai Composite index added 0.2%.

In Southeast Asia, Philippine shares jumped 0.9%, while Malaysia and Indonesia added 0.7% and 0.3%, respectively. China is a major export destination for most of the region.

The People’s Bank of China unexpectedly cut rates on Monday, as it came under increasing pressure to loosen policy and facilitate economic growth.

The cut was also helmed by a batch of weak economic data from the mainland, which shows its economy is still under pressure from several COVID-19 lockdowns imposed this year.

But investors bet that the government would roll out even more stimulus to shore up economic growth. Along with the rate cut, Reuters reported on Tuesday that the government is also supporting beleaguered property developers with bond guarantees.

Australia’s ASX 200 jumped 0.5% on support from BHP Group (NYSE:BHP), the largest stock in the country.

BHP surged 4.5% after the mining giant reported a record profit for fiscal 2022, and forecast an improvement in China’s economy this year. The firm, which is the world’s largest miner, is largely dependent on China as a buyer of its iron ore and metal exports.

Asian stocks also received a strong lead-in from Wall Street, with major indexes gaining on bets that weakening economic growth could spur slower interest rate hikes by the Federal Reserve.

Thai stocks rose 0.2%, as the central bank forecast continued economic growth in the country, even after the economy expanded by less than expected in the second quarter.

The Thai economy grew at a pace of 2.5% in the second quarter, lower than estimates of 3.1%.

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Home Depot (NYSE:HD) stock fell 0.8% after the home improvement retailer maintained its outlook for fiscal 2022 even as it reported quarterly comparable sales above expectations on steady demand for home improvement goods from builders and handymen.

Walmart (NYSE:WMT) stock rose 4.1% after the retail giant forecast a smaller drop in annual profit than it had predicted less than a month ago, after deep discounts to clear excess merchandise and a drop in fuel prices helped it beat expectations for quarterly sales.

Zoom Video (NASDAQ:ZM) stock fell 3.3% after Citigroup downgraded its investment stance on the communications company to ‘sell’ from ‘neutral’, citing growing competition from Microsoft's (NASDAQ:MSFT) Teams.

Bed Bath & Beyond (NASDAQ:BBBY) stock fell 2% after B. Riley downgraded its stance on the home furnishings retailer to ‘sell’ from ‘neutral’, saying it’s trading at unrealistic valuations.

PayPal (NASDAQ:PYPL) stock rose 1.0% after Daiwa upgraded its stance on the online payments giant to ‘outperform’ from ‘neutral’, saying the company is turning around after recent struggles.

BHP Group (NYSE:BHP) ADRs rose 3% after the mining giant reported its highest profit in 11 years on the back of gains in prices of coal and other commodities. Philips (NYSE:PHG) ADRs rose 2.6% after the Dutch health technology company unexpectedly announced the imminent departure of CEO Frans van Houten, as he takes the blame for a massive product recall that has halved its market value over the past year. ZipRecruiter (NYSE:ZIP) stock fell 7% after the online employment website operator announced disappointing guidance, saying employers were starting to pull back on job postings. ThredUp (NASDAQ:TDUP) stock rose 2.3% after the online clothing resale platform reported a 29% increase in active buyers.

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Mike Henry, chief executive officer at BHP Group, discusses his outlook for earnings, where he’s finding investment opportunities and his outlook for copper. He speaks exclusively on Bloomberg Television.

(Bloomberg) — BHP Group, the world’s biggest miner, posted its highest ever full-year profit on record commodity prices, and will push ahead with growth options on a stronger demand outlook in China.

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The producer will study plans to expand its top-earning iron ore unit to 330 million tons of production a year, and is continuing to assess options to lift volumes in copper and nickel, Melbourne-based BHP said Tuesday in a statement. A giant new potash mine in Canada remains on track to begin out in 2026.

Chief Executive Officer Mike Henry said China’s emergence from the Covid-19 lockdowns would provide a “tailwind” to the global economy, in a counterpoint to jittery sentiment on China following a swath of surprisingly weak data.

“We think that over the next six-to-12 months, China, if anything, is going to provide some stability to global growth and will help offset some of the slowing that we see elsewhere,” Henry said. China typically accounts for more than 60% of BHP’s revenue.

Read more: Why Top Miner BHP Reckons China’s Economy Is Poised to Improve

Rival miners have cautioned over a weaker outlook and Rio Tinto Group last month reported a decline in first-half profits and halved its dividend. Gold giant Newmont Mining Corp. and copper producer First Quantum Minerals Ltd. have also warned investors in recent weeks on the impact of inflationary pressures.

Shares Rise

BHP’s result was “better than expected”, Goldman Sachs Group Inc. analysts Paul Young and Hugo Nicolaci wrote in a note. But they warned stronger currencies and weaker commodity prices were key downside risks, particularly if China’s property sector does not recover in the next year.

Though BHP will face pressure from a slowdown in advanced economies, higher costs and tighter labor markets, there will be opportunities for low-cost miners as inflation also drives prices higher, the company said. Production costs across major assets rose 13% on Covid-related issues and higher prices of diesel and electricity.

The miner’s shares jumped as much as 5.5% in Sydney trading, the most since January 2021, and were 4.8% higher at A$40.79 as of 1:00 p.m. local time. Iron ore futures in Singapore rose 2.1% to $108.20 a ton.

China’s central bank on Monday cut interest rates as data showed the economy struggling on multiple fronts, and BHP’s comment on prospects there came with some caveats.

Downside risks in China include the possibility of further lockdowns, slowing exports, and continued turbulence in the country’s real estate sector, BHP said. And it noted that the iron ore market — its biggest source of earnings — would likely remain in surplus through this fiscal year.

Electric Metals

The producer is aiming to seize on any pressure on competitors to add metals tied to clean energy and electric vehicle supply chains, including copper and nickel. Copper miner OZ Minerals Ltd. — which rejected a BHP takeover approach — was a “nice to have, not a must have”, Henry told media on Tuesday.

BHP will continue to produce high quality metallurgical coal, Henry said, but plans for new coal mines in Queensland, Australia, are on hold after the state government increased royalty taxes. He also said green steel technology, including using hydrogen rather than metallurgical coal, was still “decades” away from becoming commercial.

Read more: BHP Returns to Major M&A in Hunt for EV and Clean Energy Metals

Total underlying earnings were $23.8 billion in the year to June 30, beating an average analyst forecast of $21.6 billion, and the highest since the current company was created in a 2001 merger. The producer will pay a record final dividend of $3.25 a share.

(Updates with CEO comment in fourth paragraph)

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(Bloomberg) — Chinese authorities are investigating the Minister of Industry and Information Technology Xiao Yaqing on suspicion of disciplinary violations, making him the most senior sitting cabinet official to be ensnared in a disciplinary probe in almost four years.

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The case was a “violation of discipline and law,” the country’s top anti-graft agency said in a statement Thursday, avoiding the common phrasing “serious violation of discipline and law.” The regulators didn’t offer further details on the alleged crimes by Xiao, whose ministry spearheads China’s efforts to build technologies from semiconductors to aviation, and supports the nation’s most promising startups in areas from chipmaking to bio-tech.

The probe against the 62-year-old official is unfolding weeks before the Communist Party’s 20th congress later this year, which is expected to reshuffle the country’s leadership. President Xi Jinping, who’s expected to secure a third term in the shake-up, has consolidated power over the past decade in part due to an enduring corruption crackdown that brought down dozens of former top cadres.

The announcement coincided with a monthly meeting of the Communist Party’s Politburo, which vowed to strive for the “best outcome” for economic growth this year, as concerns mount over the risks of a property crisis spreading to the broader financial system.

READ: China Looks for ‘Best Outcome’ as Economic Challenges Mount

Xiao’s ministry is the regulator for the country’s heavy industry, automobile, telecom and electronics sectors, overseeing companies from Huawei Technologies Co. to Xiaomi Corp. He has held the rank of cabinet minister since 2016, earlier leading government agencies including the country’s top state-owned assets watchdog. He attracted public attention earlier on Thursday as he was not included in a list of central government officials slated to attend the upcoming Party Congress.

Prior to his political career, Xiao mainly worked in the aluminum industry and was president of Aluminum Corp. of China when it bought a $14 billion stake in Rio Tinto Group with Alcoa Inc. in 2008. That derailed BHP Billiton Ltd.’s hostile bid for the world’s third-largest mining company and marked one of the biggest Chinese outbound investments.

Former Vice Public Security Minister Meng Hongwei, who was placed under investigation in October 2018, was the last official of such a senior rank to fall.

(Updates with details, background of Xiao)

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Rio Tinto has signalled an end to the era of record returns in the mining sector, as the Anglo-Australian group reported a sharp drop in half-year profit and more than halved its dividend payment. Rio, the world’s largest producer of steelmaking ingredient iron ore, reported underlying earnings of $8.6bn for the six months to June, down from a record $12.2bn last year, on sales of almost $30bn. While that is still the second-highest half-year payout on record and in line with its dividend policy, the dividend is significantly lower than last year’s payment of $9.1bn and below what analysts had expected.