Potash Archives - Page 9 of 61

Overview of the Recent Transaction

On August 28, 2024, SailingStone Capital Partners LLC (Trades, Portfolio), a notable investment management firm, executed a significant transaction by acquiring an additional 2,100,723 shares of Compass Minerals International Inc (NYSE:CMP). This purchase increased their total holdings in the company to 4,772,073 shares, marking a substantial addition to their portfolio. The shares were acquired at a price of $8.98 each, reflecting a strategic move by the firm to bolster its investment in the basic materials sector.

Profile of SailingStone Capital Partners LLC (Trades, Portfolio)

Warning! GuruFocus has detected 5 Warning Signs with CMP.

Founded in 2014 in San Francisco, California, SailingStone Capital Partners LLC (Trades, Portfolio) is an institutional investment management firm with a focus on the global natural resource sector. The firm is known for its concentrated, long-only investment strategy, aiming to generate attractive through-cycle returns. With a team led by experienced partners from RS Global Natural Resource, SailingStone emphasizes minimizing capital loss and leveraging market volatility to enhance shareholder value. The firm manages over $7.2 billion in assets, predominantly allocated to the energy and materials sectors.

SailingStone Capital Partners LLC Increases Stake in Compass Minerals International IncInsight into Compass Minerals International Inc

Compass Minerals International Inc, listed under the ticker CMP, operates primarily in the production of salt and specialty potash fertilizers. With key facilities in North America and the United Kingdom, the company serves a diverse range of markets, including deicing and agriculture. Despite its established market presence, Compass Minerals faces challenges reflected in its current financial metrics, such as a GF Value of $30.70 against a much lower trading price of $11.08, suggesting potential undervaluation concerns.

SailingStone Capital Partners LLC Increases Stake in Compass Minerals International IncAnalysis of the Trade's Impact

The recent acquisition by SailingStone Capital Partners LLC (Trades, Portfolio) significantly impacts its portfolio, increasing its position in Compass Minerals to 14.23%. This move not only underscores the firm's commitment to the basic materials sector but also reflects a strategic increase in a stock that they believe holds potential for value appreciation. The trade represents a 6.26% impact on their portfolio, indicating a strong conviction in the future prospects of Compass Minerals.

Market Context and Strategic Timing

The timing of SailingStone Capital Partners LLC (Trades, Portfolio)'s increased stake in Compass Minerals may be influenced by the current market conditions and the firm's analysis of the stock's valuation metrics. With Compass Minerals trading at a significant discount to its GF Value, the firm might perceive this as an opportune moment to capitalize on potential market adjustments that could favor undervalued stocks in the basic materials sector.

Comparative Analysis with Other Major Shareholders

While SailingStone Capital Partners LLC (Trades, Portfolio) has significantly increased its holdings in Compass Minerals, it is important to note other major shareholders like Hotchkis & Wiley Capital Management LLC. A comparative analysis of holding percentages could provide deeper insights into the stock's appeal to institutional investors and the broader investment community's outlook on its future performance.

Conclusion

The strategic decision by SailingStone Capital Partners LLC (Trades, Portfolio) to augment its investment in Compass Minerals aligns with its long-term investment philosophy and commitment to the basic materials sector. This move could potentially enhance the firm's portfolio performance, depending on how market conditions evolve and how effectively Compass Minerals can capitalize on its operational strengths in the coming years.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.

This article first appeared on GuruFocus.

(Bloomberg) — BHP Group expects its $10.6 billion potash mine in Canada to make money even with weakened fertilizer prices, says the head of the project.

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Jansen mine is expected to produce potash at costs that are less than the top Canadian operations of fertilizer giants Nutrien Ltd. and Mosaic Co., according to BHP’s Karina Gistelinck. She said the massive size of the operation and BHP’s heavy investment in automation are key to keeping costs down to be more competitive than other mines in Canada, the world’s top supplier.

“The strategy is to be the most cost-effective mine possible,” she said in an interview. “Even with depressed prices, we’ll be profitable.”

BHP remains optimistic on Jansen even though potash prices have tumbled more than 60% from highs seen two years ago. Prices soared in early 2022 after sanctions on Belarus and Russia’s war in Ukraine stoked fears of supply shocks in a tight market. The two nations are among the top producers of potash and, combined with Canada, account for two-thirds of the global trade.

The world’s biggest miner had already committed $5.7 billion to building the first stage of Jansen in the western Canadian province of Saskatchewan back in August 2021. Two years later, BHP earmarked an additional $4.9 billion for an expansion due to its confidence in the potash market. The spending is on top of an earlier $4.5 billion investment in the area.

Since Jansen’s approval, flows of fertilizer from Russia and Belarus have rebounded and driven down potash prices. BHP’s flagship mine is now expected to pour millions of fresh tons into a balanced market rather than one crying out for new supplies that BHP had anticipated.

Jansen is expected to deliver 4.2 million tons of potash when the first phase starts production in 2026, adding 5% to the current global potash supply, according to Gistelinck. Output is expected to double by 2031, when the project reaches full capacity.

Gistelinck said she anticipates Jansen will produce potash for less than $140 a metric ton. Market prices are expected to range from $300 a ton — in the worst-case scenario — to as high as $450 a ton in the medium to long term, she said.

BHP plans to sell the fertilizer to distributors rather than directly to farmers. The company has already secured commitments for its full potash production, which are expected to become binding contracts next year.

The Melbourne-based company is also mulling initial discounts to gain market share, Gistelinck said.

BHP is targeting Brazil — an agricultural powerhouse that’s highly dependent of fertilizer imports — as well as Southeast Asian nations and the US as major markets for selling its potash as it seeks to reduce exposure to China, she said.

Gistelinck sees demand for the crop nutrient rising 2% annually over the next two years, tracking population growth, while external factors such as the impacts of climate change could also boost consumption.

“Catastrophic events will happen more often and for longer,” she said. “And potassium helps a lot with the resilience of agricultural products.”

–With assistance from Thomas Biesheuvel.

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Compass Minerals (CMP) came out with a quarterly loss of $1.01 per share versus the Zacks Consensus Estimate of a loss of $0.67. This compares to earnings of $1.01 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of -50.75%. A quarter ago, it was expected that this minerals producer would post earnings of $0.23 per share when it actually produced earnings of $1.49, delivering a surprise of 547.83%.

Over the last four quarters, the company has surpassed consensus EPS estimates just once.

Compass , which belongs to the Zacks Chemical – Diversified industry, posted revenues of $202.9 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 0.52%. This compares to year-ago revenues of $207.6 million. The company has topped consensus revenue estimates just once over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Compass shares have lost about 63.6% since the beginning of the year versus the S&P 500's gain of 18.1%.

What's Next for Compass?

While Compass has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Compass: mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is -$0.52 on $225.64 million in revenues for the coming quarter and $0.55 on $1.13 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Chemical – Diversified is currently in the bottom 21% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Stepan Co. (SCL), another stock in the same industry, has yet to report results for the quarter ended September 2024.

This specialty chemicals company is expected to post quarterly earnings of $0.65 per share in its upcoming report, which represents a year-over-year change of +1.6%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Stepan Co.'s revenues are expected to be $564.9 million, up 0.5% from the year-ago quarter.

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OVERLAND PARK, Kan. (AP) — OVERLAND PARK, Kan. (AP) — Compass Minerals International Inc. (CMP) on Tuesday reported a loss of $43.6 million in its fiscal third quarter.

The Overland Park, Kansas-based company said it had a loss of $1.05 per share. Losses, adjusted for restructuring costs, came to $1.01 per share.

The results did not meet Wall Street expectations. The average estimate of three analysts surveyed by Zacks Investment Research was for a loss of 67 cents per share.

The minerals producer posted revenue of $202.9 million in the period, topping Street forecasts. Three analysts surveyed by Zacks expected $201.9 million.

_____

This story was generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on CMP at https://www.zacks.com/ap/CMP

OVERLAND PARK, Kan., September 17, 2024–(BUSINESS WIRE)–Compass Minerals (NYSE: CMP), a leading global provider of essential minerals, today reported preliminary fiscal 2024 third-quarter results.

The following financial results and updated 2024 outlook are preliminary estimates and are subject to change until the filing of the company’s Form 10-Q for the quarter ended June 30, 2024. The company is currently finalizing its fiscal 2024 third-quarter results and thus these preliminary estimates are based solely on information available to management as of the date of this press release. The company’s actual results may differ from these estimates due to the completion of its quarter-end closing procedures, final adjustments and developments that may arise or information that may become available, including with respect to the financial restatements described below, between now and the time the company’s financial results are finalized and included in its Form 10-Q for the quarter ended June 30, 2024. Unless otherwise noted, it should be assumed that time periods referenced below are on a fiscal-year basis.

MANAGEMENT COMMENTARY

"Compass Minerals' core businesses produced strong results in the third quarter. We had solid results in the Salt segment that reflect the robust earnings potential of that business, while we continued to see sequential improvements in realized price, adjusted EBITDA per ton, and adjusted EBITDA margin in the Plant Nutrition segment," said Edward C. Dowling Jr., president and CEO. "It’s disappointing that we have been delayed in sharing the positive performance of the core businesses with the market due to issues surrounding certain historical accounting matters. It is important for the market to know that the core Salt and Plant Nutrition business are performing well, and that we are also focused on positioning the company for better performance in the future. We are building and reinforcing a culture committed to operational excellence and continuous improvement, with an emphasis on improving cash generation and deleveraging the balance sheet. I expect that the improvements that we are making across the business will result in a stronger company and higher returns for our shareholders."

FINANCIAL RESTATEMENT UPDATE

As previously disclosed, Compass Minerals identified misstatements and material weaknesses in its (i) unaudited financial statements included in its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023, (ii) audited financial statements included in its Annual Report on Form 10-K for the period ended Sept. 30, 2023, (iii) unaudited financial statements included in its Quarterly Report on Form 10-Q for the quarterly period ended Dec. 31, 2023, and (iv) unaudited financial statements included in its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024. The misstatements primarily relate to certain contingent consideration associated with the company’s acquisition of Fortress North America, LLC, originally disclosed in the company’s Form 8-K filed on July 3, 2024, together with additional identified errors. The company provided an update on the identified misstatements and materials weaknesses in the company’s Form 12b-25 filed Aug. 9, 2024. The issues identified by the company do not materially impact the company's adjusted EBITDA or the fundamentals of the core Salt and Plant Nutrition businesses.

The company is actively engaged with its current and predecessor auditors as the company corrects the errors and restates the affected financial statements. As part of that process, additional audit procedures covering fiscal years 2021 through 2023 have been required, thereby prolonging the process to complete the restatements. These amended financial statements must be completed before the company can file its Form 10-Q for the quarter ended June 30, 2024. To date, no additional material accounting misstatements have been identified as a result of the additional testing being performed; however, the company has not fully completed its review and cannot provide assurance that other errors will not be identified.

Until the restatements are completed, Compass Minerals is limited in the amount of financial information that it can provide. The company is not able to provide an estimate of when it expects the restatements to be completed. The company is providing the following preliminary financial results for the third quarter of 2024 given its assessment that these results are not reasonably expected to be materially impacted by the restatement work described above.

PRELIMINARY QUARTERLY FINANCIAL RESULTS

	Three Months EndedJune 30,
(in millions, except per share data)		2024
Revenue	$	202.9
Operating earnings		5.9
Adjusted operating earnings*		7.4
Adjusted EBITDA*		32.8
Net loss		(43.6	)
Net loss per diluted share		(1.05	)
Adjusted net loss*		(42.1	)
Adjusted net loss* per diluted share		(1.01	)
*Non-GAAP financial measure. Reconciliations to the most directly comparable GAAP financial measure are provided in tables at the end of this press release.

PRELIMINARY QUARTERLY FINANCIAL HIGHLIGHTS

Preliminary adjusted EBITDA of $32.8 million, which includes a non-cash gain of $0.9 million related to the decrease of the Fortress contingent liability discussed below;
Strong Salt segment performance with adjusted EBITDA per ton of $28.05;
Mid-point of Salt business adjusted EBITDA guidance increased $15 million for 2024;
Average sales price for sulfate of potash increased for the second consecutive quarter to $691.27 per ton; and
Plant Nutrition adjusted EBITDA per ton and adjusted EBITDA margin of $128.57 and 18.6%, respectively.

SALT BUSINESS SUMMARY

Preliminary operating earnings for the quarter were $25.9 million and adjusted EBITDA was $41.6 million. Preliminary adjusted EBITDA per ton came in at $28.05. The second half of the fiscal year reflects the normal seasonal change in sales mix as highway deicing volumes decline going into summer months, resulting in increased contribution from the consumer and industrial (C&I) business. Preliminary quarterly operating earnings margin and adjusted EBITDA margin were 16.1% and 25.9%, respectively, for the three months ended June 30, 2024.

Preliminary Salt segment revenue totaled $160.6 million for the third quarter. In the highway deicing business, the company realized an average highway deicing selling price of $77.20 per ton and sales volumes were 1.09 million tons. C&I pricing was $194.35 per ton during the quarter. Associated volumes were 393 thousand tons, which were impacted in the quarter by short-term interruptions in customer processing needs and timing of sales.

PLANT NUTRITION BUSINESS SUMMARY

In the Plant Nutrition business, preliminary operating loss totaled $1.4 million and adjusted EBITDA was $7.2 million for the quarter.

Plant Nutrition preliminary revenue for the quarter totaled $38.8 million. This reflects sales volumes of 56 thousand tons. The average segment sales price for the quarter was $691.27 per ton, which represents a sequential 2% increase in pricing.

FORTRESS NORTH AMERICA UPDATE

Compass Minerals continues to evaluate various alternatives regarding the path forward for Fortress North America. Discussions are ongoing with the U.S. Forest Service (USFS) regarding the evaluation and testing of the company's non-magnesium chloride-based aerial fire retardants.

FINANCIAL POSITION AND LIQUIDITY

The company ended the quarter with $220.8 million of liquidity, comprised of $12.8 million in cash and cash equivalents and $208.0 million of availability under its $375 million revolving credit facility.

At quarter-end, the preliminary consolidated total net leverage ratio was 4.3 times, within the company's net leverage covenant of 6.5 times. The company has amended its credit agreement and receivables financing agreement to accommodate the delay in providing required final compliance certifications related to third quarter of 2024 financial results until Nov. 29, 2024.

PRELIMINARY UPDATED 2024 OUTLOOK

Preliminary updated guidance and commentary for 2024 is reflected below.

Salt Segment
	2024 Range
Highway deicing sales volumes (thousands of tons)	7,400 – 7,500
Consumer and industrial sales volumes (thousands of tons)	1,800 – 1,900
Total salt sales volumes (thousands of tons)	9,200 – 9,400

Revenue (in millions)	$900 – $910
Adj. EBITDA (in millions)	$215 – $225

The outlook for adjusted EBITDA from the Salt segment is improved from guidance provided on May 9, 2024. Anticipated costs related to the curtailment of Goderich mine that were expected to be recognized in 2024 are lower than had been originally forecast, resulting in improved expectations for adjusted EBITDA for the year.

The company continues to work toward reducing salt inventory levels in the coming deicing season and accelerating conversion of excess inventory to cash.

2024/2025 North American Bid Season

Approximately 70% of the company's North American highway deicing bidding process for the upcoming winter season has been completed. Based on bid results to date, which include both positive and negative price changes that reflect regional market conditions and competitiveness, the company expects its average contract selling price for the coming season to be approximately 2% lower than prices in fiscal 2024. Market bid volumes are expected to be down approximately 7% to 10% compared to fiscal 2024, which is consistent with expectations given inventory levels across the service market and producer supply positions following two consecutive mild winters. It is important to distinguish between committed bid volumes, which are used to establish minimum and maximum service levels for certain customers, and expected sales volumes, which will be driven ultimately by winter weather activity in the coming year. Sales volumes can be above or below committed volumes in any given deicing season.

Plant Nutrition Segment
	2024 Range
Sales volumes (thousands of tons)	265 – 275
Revenue (in millions)	$175 – $185
Adj. EBITDA (in millions)	$21 – $26

The revised Plant Nutrition guidance above reflects lower sales volumes and increased costs partially offset by higher realized pricing.

Corporate
	2024 Range
	Fortress1	Other2	Total
Adj. EBITDA (in millions)	$3 – $4	($44) – ($39)	($41) – ($35)

(1)		Fortress contribution includes adjusted EBITDA carried over from its calendar year 2023 USFS take-or-pay contract as well as ongoing overhead costs; no assumptions with respect to 2024 activity with the USFS have been assumed.
(2)		Other adjusted EBITDA includes i) approximately $5 million of lithium-related costs, unchanged from previously provided guidance, and ii) the year-to-date non-cash gain of $23.1 million related to the decline in the valuation of the contingent consideration liability associated with the Fortress acquisition, reflecting quarterly fluctuations of that liability due to changes in the discount rate and the projected business performance used in the valuation.

Projected Corporate segment results shown in the table above include corporate expenses in support of the company's core businesses, operating expenses related to the company's terminated lithium project, Fortress financial results, and the results of DeepStore, the company's records and management services business in the U.K. The improvement in guidance for Other reflects the correction, disclosed in the Form 8-K filed on July 3, 2024, of an error in the calculation of adjusted EBITDA that understated this measure by approximately $10 million in the first half of 2024.

Total Compass Minerals
	2024 Adjusted EBITDA
	Salt	Plant Nutrition	Corporate1	Total
Adj. EBITDA (in millions)	$215 – $225	$21 – $26	($41) – ($35)	$195 – $216

	2024 Capital Expenditures
	Sustaining	Lithium2	Fortress	Total
Capital expenditures (in millions)	$80 – $90	~$30	$5 – $10	$115 – $130

(1)		Includes financial contribution of Fortress and DeepStore.
(2)		Lithium capital expenditures principally relate to items committed to or made prior to the suspension of further investment in the lithium project. As a result of the termination of the lithium project and the related impairment in the first quarter of 2024, a portion of these expenditures that related to committed items that had not been received by Dec. 31, 2023 were not classified as capital expenditures within the consolidated statements of cash flows when paid.

Total capital expenditures for the company in 2024 remain unchanged from the company’s prior guidance and are expected to be within a range of $115 million to $130 million. Approximately $30 million of lithium-associated expenditures are included, principally related to items that were committed to prior to the November 2023 project suspension. The company's projections also include $5 million to $10 million of capital investment in the company's fire-retardant business.

Other Assumptions
($ in millions)	2024 Range
Depreciation, depletion and amortization	$100 – $110
Interest expense, net	$65 – $70
Effective income tax rate (excl. valuation allowance and impairments)	(25%) – (20%)

CONFERENCE CALL

The occurrence and timing of an earnings call to discuss results for the third quarter of 2024 will be dependent on the ultimate completion of the aforementioned restatements.

About Compass Minerals

Compass Minerals (NYSE: CMP) is a leading global provider of essential minerals focused on safely delivering where and when it matters to help solve nature’s challenges for customers and communities. The company’s salt products help keep roadways safe during winter weather and are used in numerous other consumer, industrial, chemical and agricultural applications. Its plant nutrition products help improve the quality and yield of crops, while supporting sustainable agriculture. Additionally, it is working to develop a long-term fire-retardant business. Compass Minerals operates 12 production and packaging facilities with nearly 2,000 employees throughout the U.S., Canada and the U.K. Visit compassminerals.com for more information about the company and its products.

Forward-Looking Statements and Other Disclaimers

This press release may contain forward-looking statements, including, without limitation, statements regarding preliminary results and information, statements about earnings potential and efforts to strengthen the company and improve shareholder returns; management of inventory levels; Fortress North America's path forward; expectations for highway deicing pricing and volumes for the upcoming winter; the restatement of certain of the company’s previously issued financial statements; and the company's outlook for 2024, including its expectations regarding sales volumes, revenue, Adjusted EBITDA, corporate and other expense, depreciation, depletion and amortization, interest expense, tax rates, and capital expenditures. Forward-looking statements are those that predict or describe future events or trends and that do not relate solely to historical matters. The company uses words such as "may," "would," "could," "should," "will," "likely," "expect," "anticipate," "believe," "intend," "plan," "forecast," "outlook," "project," "estimate" and similar expressions suggesting future outcomes or events to identify forward-looking statements or forward-looking information. These statements are based on the company’s current expectations and involve risks and uncertainties that could cause the company’s actual results to differ materially. The differences could be caused by a number of factors, including without limitation (i) weather conditions, (ii) inflation, the cost and availability of transportation for the distribution of the company’s products and foreign exchange rates, (iii) pressure on prices and impact from competitive products, (iv) any inability by the company to successfully implement its strategic priorities or its cost-saving or enterprise optimization initiatives, and (v) the risk that the company may not realize the expected financial or other benefits from its ownership of Fortress North America. For further information on these and other risks and uncertainties that may affect the company’s business, see the "Risk Factors" and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" sections of the company’s Annual Report on Form 10-K for the period ended Sept. 30, 2023, and its Quarterly Reports on Form 10-Q for the quarters ended Dec. 31, 2023 and Mar. 31,2024, and any amendments thereto, as well as the company's other SEC filings. The company undertakes no obligation to update any forward-looking statements made in this press release to reflect future events or developments, except as required by law. Because it is not possible to predict or identify all such factors, this list cannot be considered a complete set of all potential risks or uncertainties.

Non-GAAP Measures

In addition to using U.S. generally accepted accounting principles ("GAAP") financial measures, management uses a variety of non-GAAP financial measures described below to evaluate the company’s and its operating segments’ performance. While the consolidated financial statements provide an understanding of the company’s overall results of operations, financial condition and cash flows, management analyzes components of the consolidated financial statements to identify certain trends and evaluate specific performance areas.

Management uses EBITDA, EBITDA adjusted for items which management believes are not indicative of the company’s ongoing operating performance ("Adjusted EBITDA") and EBITDA margin to evaluate the operating performance of the company’s core business operations because its resource allocation, financing methods and cost of capital, and income tax positions are managed at a corporate level, apart from the activities of the operating segments, and the operating facilities are located in different taxing jurisdictions, which can cause considerable variation in net earnings. Management also uses adjusted operating earnings, adjusted operating margin, adjusted net earnings, and adjusted net earnings per diluted share, which eliminate the impact of certain items that management does not consider indicative of underlying operating performance. The presentation of these measures should not be construed as an inference that future results will be unaffected by unusual or non-recurring items. Management believes these non-GAAP financial measures provide management and investors with additional information that is helpful when evaluating underlying performance. EBITDA and Adjusted EBITDA exclude interest expense, income taxes and depreciation, depletion and amortization, each of which are an essential element of the company’s cost structure and cannot be eliminated. In addition, Adjusted EBITDA and Adjusted EBITDA margin exclude certain cash and non-cash items, including stock-based compensation, impairment charges and certain restructuring charges. Consequently, any measure that excludes these elements has material limitations. The non-GAAP financial measures used by management should not be considered in isolation or as a substitute for net earnings, operating earnings, cash flows or other financial data prepared in accordance with GAAP or as a measure of overall profitability or liquidity. These measures are not necessarily comparable to similarly titled measures of other companies due to potential inconsistencies in the method of calculation. The calculation of non-GAAP financial measures as used by management is set forth in the following tables. All margin numbers are defined as the relevant measure divided by sales. The company does not provide a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP, as the company is unable to estimate significant non-recurring, unusual items and/or distinct non-core initiatives without unreasonable effort. The amounts and timing of these items are uncertain and could be material to the company’s results.

Adjusted operating earnings, adjusted operating earnings margin, adjusted net earnings (loss), and adjusted net earnings (loss) per diluted share are presented as supplemental measures of the company’s performance. Management believes these measures provide management and investors with additional information that is helpful when evaluating underlying performance and comparing results on a year-over-year normalized basis. These measures eliminate the impact of certain items that management does not consider indicative of underlying operating performance. These adjustments are itemized below. Adjusted net earnings (loss) per diluted share is adjusted net earnings (loss) divided by weighted average diluted shares outstanding. You are encouraged to evaluate the adjustments itemized above and the reasons management considers them appropriate for supplemental analysis. In evaluating these measures, you should be aware that in the future the company may incur expenses that are the same as or similar to some of the adjustments presented below.

Special Items Impacting the Three Months Ended June 30, 2024(unaudited, in millions, except per share data)
Item Description	Segment	Line Item	Amount		TaxEffect(1)		After Tax		EPS Impact
Restructuring charges(2)	Corporate and Other	Other operating expense	$	1.5	$	—	$	1.5	$	0.04
Total			$	1.5	$	—	$	1.5	$	0.04

(1)		There were no substantial income tax benefits related to these items given the U.S. valuation allowances on deferred tax assets.
(2)		Restructuring charges do not include certain reductions in stock-based compensation associated with forfeitures stemming from the restructuring activities.

Reconciliation for Adjusted Operating Earnings(unaudited, in millions)
	Three Months EndedJune 30,
		2024
Operating earnings	$	5.9
Restructuring charges(1)		1.5
Adjusted operating earnings	$	7.4
Sales		202.9
Operating margin		2.9	%
Adjusted operating margin		3.6	%

(1)

The company incurred severance and related charges for reductions in workforce and changes to executive leadership and additional restructuring costs related to the termination of the company’s lithium development project.

Reconciliation for Adjusted Net Loss(unaudited, in millions)
	Three Months EndedJune 30,
		2024
Net loss	$	(43.6	)
Restructuring charges(1)		1.5
Adjusted net loss	$	(42.1	)

Net loss per diluted share	$	(1.05	)
Adjusted net loss per diluted share	$	(1.01	)
Weighted-average common shares outstanding (in thousands):
Diluted		41,342

(1)

Reconciliation for EBITDA and Adjusted EBITDA(unaudited, in millions)
	Three Months EndedJune 30,
		2024
Net loss	$	(43.6	)
Interest expense		17.2
Income tax expense		32.7
Depreciation, depletion and amortization		26.1
EBITDA		32.4
Adjustments to EBITDA:
Stock-based compensation – non-cash		(0.7	)
Interest income		(0.2	)
Gain on foreign exchange		(0.5	)
Restructuring charges(1)		1.5
Other expense, net		0.3
Adjusted EBITDA	$	32.8

(1)

Salt Segment Performance(unaudited, in millions, except for sales volumes and prices per short ton)
	Three Months EndedJune 30,
		2024
Sales	$	160.6
Operating earnings	$	25.9
Operating margin		16.1	%
EBITDA(1)	$	41.6
EBITDA(1) margin		25.9	%
Sales volumes (in thousands of tons):
Highway deicing		1,090
Consumer and industrial		393
Total Salt		1,483
Average prices (per ton):
Highway deicing	$	77.20
Consumer and industrial	$	194.35
Total Salt	$	108.27

(1)

Non-GAAP financial measure. Reconciliations follow in these tables.

Reconciliation for Salt Segment EBITDA(unaudited, in millions)
	Three Months EndedJune 30,
		2024
Reported GAAP segment operating earnings	$	25.9
Depreciation, depletion and amortization		15.7
Segment EBITDA	$	41.6
Segment sales		160.6
Segment EBITDA margin		25.9	%

(1)

The company incurred severance and related charges related to a reduction of its workforce.

Plant Nutrition Segment Performance(unaudited, dollars in millions, except for sales volumes and prices per short ton)
	Three Months EndedJune 30,
		2024
Sales	$	38.8
Operating loss	$	(1.4	)
Operating margin		(3.6	)%
EBITDA(1)	$	7.2
EBITDA(1) margin		18.6	%
Sales volumes (in thousands of tons)		56
Average price (per ton)	$	691.27

(1)

Non-GAAP financial measure. Reconciliations follow in these tables.

Reconciliation for Plant Nutrition Segment EBITDA(unaudited, in millions)
	Three Months EndedJune 30,
		2024
Reported GAAP segment operating loss	$	(1.4	)
Depreciation, depletion and amortization		8.6
Segment EBITDA	$	7.2
Segment sales		38.8
Segment EBITDA margin		18.6	%

COMPASS MINERALS INTERNATIONAL, INC.CONSOLIDATED STATEMENTS OF OPERATIONS(unaudited, in millions, except share and per-share data)

	Three Months EndedJune 30,
		2024
Sales	$	202.9
Shipping and handling cost		53.2
Product cost		117.1
Gross profit		32.6
Selling, general and administrative expenses		27.5
Other operating income		(0.8	)
Operating earnings		5.9
Other (income) expense:
Interest income		(0.2	)
Interest expense		17.2
Gain on foreign exchange		(0.5	)
Other expense, net		0.3
Loss before income taxes		(10.9	)
Income tax expense		32.7
Net loss	$	(43.6	)

Basic net loss per common share	$	(1.05	)
Diluted net loss per common share	$	(1.05	)
Weighted-average common shares outstanding (in thousands):(1)
Basic		41,342
Diluted		41,342

(1)

Weighted participating securities include RSUs and PSUs that receive non-forfeitable dividends and consist of 632,000 weighted participating securities for the three months ended June 30, 2024.

COMPASS MINERALS INTERNATIONAL, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(unaudited, in millions)

	June 30,
		2024
ASSETS
Cash and cash equivalents	$	12.8
Receivables, net		92.3
Inventories		407.5
Other current assets		34.4
Property, plant and equipment, net		787.9
Intangible and other noncurrent assets		260.3
Total assets	$	1,595.2

LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt	$	6.3
Other current liabilities		182.1
Long-term debt, net of current portion		868.8
Deferred income taxes and other noncurrent liabilities		185.9
Total stockholders' equity		352.1
Total liabilities and stockholders' equity	$	1,595.2

COMPASS MINERALS INTERNATIONAL, INC.SEGMENT INFORMATION(unaudited, in millions)

Three Months Ended June 30, 2024	Salt		PlantNutrition			Corporate& Other(1)			Total
Sales to external customers	$	160.6	$	38.8		$	3.5		$	202.9
Intersegment sales		—		2.8			(2.8	)		—
Shipping and handling cost		48.2		5.0			—			53.2
Operating earnings (loss)(2)(3)		25.9		(1.4	)		(18.6	)		5.9
Depreciation, depletion and amortization		15.7		8.6			1.8			26.1
Total assets (as of end of period)		1,013.3		408.1			173.8			1,595.2

(1)		Corporate and other includes corporate entities, records management operations, the Fortress fire retardant business, equity method investments, lithium costs and other incidental operations and eliminations. Operating earnings (loss) for corporate and other includes indirect corporate overhead, including costs for general corporate governance and oversight, lithium-related expenditures, as well as costs for the human resources, information technology, legal and finance functions.
(2)		Corporate operating results were impacted by net gains of $0.9 million related to the decline in the valuation of the Fortress contingent consideration for the three months ended June 30, 2024.
(3)		The company continued to take steps to align its cost structure to its current business needs. These initiatives impacted Corporate operating results and resulted in net severance and related charges for reductions in workforce and changes to executive leadership and additional restructuring costs related to the termination of the company’s lithium development project of $1.5 million for the three months ended June 30, 2024.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240917394898/en/

Contacts

Investor Contact Brent CollinsVice President, Treasurer & Investor Relations+1.913.344.9111InvestorRelations@compassminerals.com

Media ContactRick AxthelmChief Public Affairs and Sustainability Officer+1.913.344.9198MediaRelations@compassminerals.com

(Bloomberg) — Hedge funds are slashing bets on an oil rally amid a rout. Iron ore is on a downward trend as declines for steel prices in China bite. And biofuels are getting a boost over oil in Brazil.

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Here are five notable charts to consider in global commodity markets as the week gets underway.

Oil

Hedge funds turned the least bullish on crude in records going back more than 13 years on the prospect of swelling supplies and waning demand. Money managers decreased their combined positions on Brent and West Texas Intermediate oil by 99,889 lots to a total net-long position of 139,242 lots, according to ICE Futures Europe and CFTC data for the week ended Sept. 3. Those numbers were released Friday afternoon, and represent the lowest net-long positions based on data stretching back to March 2011. The souring sentiment comes amid a plunge in prices in recent days, driven by worries about demand in the US and China and exacerbated by heavy selling from algorithmic-based funds. Oil rebounded on Monday.

Iron Ore

Iron ore has been the clearest victim among commodities of China’s property crisis. The raw material for steelmaking is down by more than a third this year, and is now trading well below the key $100-a-ton level. Miner BHP Group Ltd. has said that prices should get support in a range between $80 to $100 as high-cost mines are forced to shut, but that widely held view could be tested if China’s post-summer steel recovery disappoints. Futures edged higher Monday after earlier slipping below $90 a ton for the first time since 2022.

Batteries

Battery storage companies will have a large showing at RE+, North America’s largest clean energy conference that kicks off this week in Anaheim, California. Utilities and renewable developers are installing more batteries to help integrate an increasing amount of intermittent solar and wind energy. Batteries can be charged when clean energy is plentiful and cheap and then tapped when the sun isn’t shining or the wind isn’t blowing. The global market for energy storage systems is expected to nearly double by the end of this decade, according to BloombergNEF.

Canola

China has initiated an anti-dumping probe into imports of Canadian rapeseed amid escalating trade tensions after Canada imposed tariffs on Chinese-made electric vehicles, steel and aluminum. Canada is among the world’s top producers and suppliers of the oilseed known in the country as canola. Canada is expected to reclaim No. 1 ranking for production for the 2024/25 marketing year, ending the European Union’s three-year streak as top producer, according to US Department of Agriculture forecasts. Canada is estimated to account for almost 23% of global output. More than 90% of China’s rapeseed imports last year were from Canada. Canola futures rose on Monday.

Biofuels

New legislation in Brazil is set to support farmers by pushing additional demand toward biofuels — and away from fossil fuels produced by state-controlled oil giant Petroleo Brasileiro SA. President Luiz Inacio Lula da Silva’s government creates broader mandates for ethanol and biodiesel, reinforcing Brazil’s strategy of relying on its bountiful crops to address the energy transition. Brazil is already a huge biofuels’ consumer, producing flexible-fuel cars that can run on ethanol alone.

–With assistance from Mariana Durao, Doug Alexander and Martin Ritchie.

(Adds Monday market moves for oil, iron ore and canola.)

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GMIN to acquire the CentroGold Project in Brazil's prospective Gurupi Gold Belt from BHP
CentroGold contains 1.7 million ounces of indicated and 0.6 million ounces of inferred JORC-compliant gold resource that is open for expansion in all directions and at depth
District-scale land package comprises 47 tenements covering ~1,900 km2 and offers potential for multiple new discoveries
CentroGold to provide long-term growth following Tocantinzinho ramp-up and Oko West development
Accretive transaction adds to GMIN's project pipeline with no upfront cost

BROSSARD, QC, Sept. 9, 2024 /CNW/ – G Mining Ventures Corp. ("GMIN" or the "Corporation") (TSX: GMIN) (OTCQX: GMINF) is pleased to announce that it has entered into a purchase and sale agreement to acquire tenements in the Gurupi Gold Belt from wholly-owned subsidiaries of BHP Group Limited ("BHP") (ASX: BHP, NYSE: BHP, LSE: BHP, JSE: BHG). This includes the CentroGold Project ("CentroGold" or the "Project"). In consideration for the acquisition, GMIN will grant BHP a 1.0% NSR royalty on the first 1 million ounces of gold produced at the tenements and a 1.5% NSR royalty on gold production thereafter (the "Transaction").

CentroGold is in the state of Maranhão, located in northern Brazil, and comprises 47 tenements encompassing ~1,900 square kilometers ("km2"). The Project hosts multiple identified gold targets along a +80 km mineralized trend, including the Blanket, Contact and Chega Tudo open pit deposits, which currently host 2.3 million ounces of JORC-compliant gold resources and remain open for expansion. In July 2019, Oz Minerals Limited ("Oz Minerals"), which was later acquired by BHP in 2023, released a pre-feasibility study on the Blanket and Contact deposits. The pre-feasibility study envisioned a 10-year mine life with an average annual gold production of 100,000 to 120,000 ounces per year, with 190,000 to 210,000 ounces of gold per year in the first two years of production.

GMIN views the Project as an advanced-stage exploration asset with extensive exploration and engineering work completed to date, which includes over 135,000 meters of exploration core drilling. The Project's size, scope, and development timeline will be redesigned to suit GMIN's long-term growth plans, ensuring resources are allocated in line with our strategy of maximizing value for all stakeholders. GMIN intends to build on CentroGold's existing geologic model and redesign the Project from first principles to better fit today's new permitting requirements and economic environment. Shortly after the Transaction's closing, GMIN plans to update the JORC-compliant gold resource to meet National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101"). The current corporate priorities that will take precedence are ramping up the Tocantinzinho Gold Mine in Brazil to nameplate capacity and advancing the Oko West Gold Project in Guyana toward a construction decision in H2-25.

Louis-Pierre Gignac, President & Chief Executive Officer, commented: "We are excited to acquire another prospective project and begin to grow into the multi-asset growth company we always envisioned to become. CentroGold boasts an attractive starting resource base on a large land package that covers ~1,900 km2 with significant exploration upside, located within a proven geological belt. This acquisition rounds out a high-quality portfolio of gold assets, which includes a producing mine in Tocantinzinho, a development project in Oko West, and a high-potential exploration project in CentroGold. I believe this cash-flowing and high-growth portfolio offers our shareholders tremendous opportunity for value creation."

Dušan Petković, Senior Vice President, Corporate Strategy, commented: "The acquisition of CentroGold perfectly aligns with our strategy of acquiring high-quality, undervalued assets that GMIN is uniquely qualified to unlock. 2024 has been a transformational year for GMIN, headlined by two acquisitions that have grown our gold resource base from 2.1 million ounces measured and indicated to 8.1 million ounces, and from 50 thousand inferred to 2.2 million ounces, creating an exciting pipeline of near-term and longer-dated growth projects. Looking forward, we are excited to demonstrate and realize our asset base's immense potential."

GMIN Projects Portfolio (CNW Group/G Mining Ventures Corp)

CentroGold Highlights

High-quality resource base open for expansion – 1.7 million ounces of indicated and 0.6 million ounces of inferred JORC-compliant gold resource across three open pit deposits that are open for expansion
Large prospective land package – ~1,900 km2 land package with multiple identified gold targets, which remain under-explored, with existing resource occupying only ~8% of the total land package
District-scale potential – Property encompasses +80 km mineralized trend covering +80% of the total prospective Gurupi geological province
Opportunity for tier 1 project – A pre-feasibility study was completed by Oz Minerals in July 2019 that outlines the potential for a compelling initial project with high operating margin and return
Leverages GMIN's expertise – GMIN's management team is ideally positioned to unlock CentroGold's value, leveraging in-country and global community engagement experience to advance Project permitting
Fortifies GMIN Growth Pipeline – Ideally sequenced to provide long-term growth following Tocantinzinho ramp-up, brownfield exploration, and Oko West development and construction

Blanket & Contact Reserve & Resource Estimate

	Tonnage	Grade	Contained
Reserve & Resource Estimate	(000 t Material)	(g/t Au)	(000 oz Au)
Proven & Probable Reserves	20,000	1.7	1,100
Indicated Resources	21,000	1.9	1,300
Inferred Resources	7,300	1.8	410
Total Resources	28,300	1.9	1,710
Note: (1)(2)(3)(4)(5)(6)(7)

Chega Tudo Resource Estimate

	Tonnage	Grade	Contained
Resource Estimate	(000 t Material)	(g/t Au)	(000 oz Au)
Indicated Resources	8,200	1.6	425
Inferred Resources	3,100	1.5	152
Total Resources	11,300	1.6	577
Note: (1)(2)(3)(4)(5)(6)(7)

Transaction Summary

GMIN has agreed to purchase the CentroGold Project from BHP in exchange for a 1.0% NSR royalty on the first 1 million ounces of gold produced at the Project and 1.5% NSR on gold production thereafter.

The Transaction is expected to close in Q1-25 and is subject to customary closing conditions, including BHP receiving the appropriate approvals from the Vietnamese and Brazilian Competition bodies.

Advisors and Counsel

RBC Capital Markets is acting as financial advisor to GMIN and its Board of Directors. Blake, Cassels & Graydon LLP and Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados are acting as GMIN's legal advisors.

Qualified Person

Louis-Pierre Gignac, President & Chief Executive Officer of GMIN, a QP as defined in NI 43-101, has reviewed the press release on behalf of the Corporation and has approved the technical disclosure contained in this press release.

About G Mining Ventures Corp.

G Mining Ventures Corp. (TSX: GMIN) (OTCQX: GMINF) is a mining company engaged in the acquisition, exploration and development of precious metal projects to capitalize on the value uplift from successful mine development. GMIN is well-positioned to grow into the next mid-tier precious metals producer by leveraging strong access to capital and proven development expertise. GMIN is currently anchored by the Tocantinzinho Gold Project in Brazil and Oko West Project in Guyana, both mining friendly and prospective jurisdictions.

Additional Information

For further information on GMIN, please visit the website at www.gmin.gold.

Notes

1.	For details on the estimation of mineral resources and reserves, including the key assumptions, parameters and methods used to estimate the mineral resources and mineral reserves, Canadian investors should refer to the ASX JORC Code Technical Reports for CentroGold and on file at www.asx.com.au and the Oz Minerals 2020 Annual Report.
2.	See Oz Minerals December 2020 Quarterly Report Presentation.
3.	See technical report titled "Gurupi province potential strengthened on CentroGold Pre-Feasibility Study" dated July 11, 2019 and report titled "CentroGold Project Combined 'Blanket' and 'Contact' Mineral Resource as at 06 May 2019 and Ore Reserve as at 24 June 2019 Statement".
4.	See Avanco Copper Chega Tudo ASX technical report titled "CentroGold Resources Increase 45% and Exceeds 1.8 Million Ounces" dated November 13 2017.
5.	Numbers may not add due to rounding.
6.	Mineral resources which are not mineral reserves do not have demonstrated economic viability.
7.	Mineral resources are inclusive of mineral reserves.

Cautionary Statement on Forward-Looking Information

All statements, other than statements of historical fact, contained in this press release constitute "forward-looking information" and "forward-looking statements" within the meaning of certain securities laws and are based on expectations and projections as of the date of this press release. Forward-looking statements contained in this press release include, without limitation, those related to (i) GMIN closing the Transaction in Q1 2025; (ii) CentroGold's resources being open for expansion in all directions and at depth; (iii) CentroGold hosting multiple gold targets; (iv) CentroGold's prospective land package and exploration upside; (v) the conclusions of the July 2019 pre-feasibility study; (vi) GMIN's plans to allocate the CentroGold resources in line with its strategy and build on CentroGold's existing geological model to redesign it; (vii) GMIN's plans to update CentroGold's existing resource to NI 43-101 standards; (viii) GMIN's priorities to ramp up the Tocantinzinho mine to nameplate capacity and to advance Oko West toward a construction decision in H2 2025; (ix) the quoted expectations of GMIN's President & Chief Executive Officer and those of GMIN's Senior Vice President, Corporate Strategy; and * more generally, the two tables outlining the resource estimates" as well as the sections entitled "CentroGold Highlights" and "About G Mining Ventures Corp.".

Forward-looking statements are based on expectations, estimates and projections as of the time of this press release. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Corporation as of the time of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. These estimates and assumptions may prove to be incorrect. Such assumptions include, without limitation, those relating to the price of gold and currency exchange rates, those outlined in the 2019 pre-feasibility study and those underlying the items listed on the above sections entitled "CentroGold Highlights" and "About G Mining Ventures Corp.".

Many of these uncertainties and contingencies can directly or indirectly affect, and could cause, actual results to differ materially from those expressed or implied in any forward-looking statements. There can be no assurance that, notably but without limitation, the Corporation will (i) CentroGold will provide long-term growth and prove an accretive transaction, (ii) any of CentroGold's targets will lead to additional resources and eventually to gold production, (iii) the expected mine life and annual gold production indicated in the 2019 pre-feasibility study will materialize, (iv) GMIN's expectations regarding CentroGold, as set out in the section entitled "CentroGold Highlights" will materialize, (v) GMIN will achieve its stated objectives for Tocantinzinho and Oko West, or (vi) use TZ and Oko West to grow GMIN into the next intermediate producer, as future events could differ materially from what is currently anticipated by the Corporation. In addition, there can be no assurance that Brazil and/or Guyana will remain mining friendly and prospective jurisdictions.

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that estimates, forecasts, projections and other forward-looking statements will not be achieved or that assumptions do not reflect future experience. Forward-looking statements are provided for the purpose of providing information about management's expectations and plans relating to the future. Readers are cautioned not to place undue reliance on these forward-looking statements as a number of important risk factors and future events could cause the actual outcomes to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates, assumptions and intentions expressed in such forward-looking statements. All of the forward-looking statements made in this press release are qualified by these cautionary statements and those made in the Corporation's other filings with the securities regulators of Canada including, but not limited to, the cautionary statements made in the relevant sections of the Corporation's (i) Annual Information Form dated March 27, 2024, for the financial year ended December 31, 2023, and (ii) Management Discussion & Analysis. The Corporation cautions that the foregoing list of factors that may affect future results is not exhaustive, and new, unforeseeable risks may arise from time to time. The Corporation disclaims any intention or obligation to update or revise any forward-looking statements or to explain any material difference between subsequent actual events and such forward-looking statements, except to the extent required by applicable law.

G Mining Ventures Logo (CNW Group/G Mining Ventures Corp)Cision

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(Bloomberg) — China’s steel-industry slowdown looks set to deepen, with BHP Group Ltd., the world’s biggest miner, and China Baowu Group Ltd., the top iron ore buyer, flagging concerns as demand fades after decades of growth.

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While both BHP and Baowu’s listed unit posted relatively healthy profits on Tuesday, their downbeat comments on the outlook for steel will intensify global concerns about a worsening slump. Baoshan Iron & Steel Ltd. pointed to “sluggish” consumption, while BHP Chief Executive Officer Mike Henry highlighted China’s real estate sector and “uneven” recovery.

China dominates the global steel market, but demand for the alloy has slipped by more than 10% since 2020, likely marking an end to a long boom that supercharged profits for big iron ore shippers like BHP. Those concerns have intensified in recent months as the nation’s property crisis has dragged on. Benchmark steel prices have plunged to multiyear lows, and mills now face brutal competition for buyers both at home as well as overseas.

The steel industry is marked by “strong supply, weak demand, high costs, and low prices,” Baoshan Iron & Steel said in its earnings statement. “In the second half of the year, the steel industry will maintain a situation of oversupply, and steel companies will continue to face pressure.”

BHP produces 260 million tons of iron ore a year, most of it shipped to China, where Baowu, the world’s top steelmaker, is the miner’s biggest single customer. The unfolding crisis has already taken a heavy toll on iron ore prices, with futures for the commodity collapsing by more than a quarter this year.

“We maintain our belief that China’s steel production has plateaued above 1 billion tons and this is likely to continue across the mid-2020s,” BHP said. Against that challenging backdrop, CEO Henry is leading a pivot toward copper as demand for the energy-transition metal expands, with expectations that the market for that metal will flip to a deficit later this decade.

Better Than Most

Both BHP and the Chinese steel producer have so far escaped the worst effects of the slump, which got markedly worse in July and August as mills ratcheted back production. BHP’s underlying iron ore earnings rose 13% in its financial year through June, while Baosteel’s first-half net income was steady.

Baosteel’s first-half margins were likely to be unsustainable in the current quarter, Citigroup Inc. analysts warned in a note. The bank sees downside risks to its full-year earnings forecast.

Still, Baosteel and the iron ore majors are likely in a better shape than many of their smaller peers as their scale and low costs will help them to weather the downturn. Higher-cost miners will face pressure to halt output when prices fall below $100 a ton — a level that was breached recently — while the worst effects of China’s steel slump will be borne by smaller, private mills.

“Baosteel can keep standing out despite the Chinese steel industry’s challenging second-half profit outlook,” Bloomberg Intelligence analyst Michelle Leung wrote in a note.

Other major Chinese mills including Maanshan Iron & Steel Co. Ltd. and Hesteel Co. Ltd. are due to release first-half earnings this week.

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(Bloomberg) — The average Chinese citizen can expect to live two years longer thanks to the country’s push for cleaner skies, according to the University of Chicago.

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China has reduced air pollution by 41% in the decade through 2022 due to the success of stricter public policies, the university’s Energy Policy Institute said in a report on Wednesday. The government’s National Air Quality Action Plan was launched after harmful smog peaked in 2013, targeting fewer cars on the road, cuts to steel capacity and bans on coal-fired power plants in major urban areas.

Other measures included encouraging the adoption of renewables and the switch from coal to cleaner-burning natural gas.

China accounts for 20% of global health problems associated with air quality, and pollution levels in the country are still 5.6 times higher than the World Health Organization’s guideline, according to the report. Only tobacco use is a bigger threat to life expectancy, and meeting the WHO’s pollution target would add another 2.3 years to the nation’s average life span.

The government’s latest goal, introduced in November 2023, is to cut smog by 10% in major cities from 2020 levels by the end of next year.

Air pollution around the world is highly unequal, according to the report, which found that people in the worst affected areas breathe air that is six times more polluted than those in the least affected. As a result, their life expectancy falls by an average of 2.7 years compared to those living in the cleanest places.

On the Wire

China’s steel-industry slowdown looks set to deepen, with BHP Group Ltd., the world’s biggest miner, and China Baowu Group Ltd., the top iron ore buyer, flagging concerns as demand fades after decades of growth.

Fortescue Ltd. reported a small increase in full-year profit, but the fourth-largest iron ore miner missed analyst forecasts as it battled inflationary pressures while weathering a slowdown in demand for the steelmaking material from biggest customer China.

BHP Group Ltd. offered a cautious near-term outlook for copper, while sticking to the widely-held view that the energy transition metal is eventually headed for severe shortages and much higher prices.

This Week’s Diary

(All times Beijing unless noted.)

Wednesday, Aug. 28:

CCTD’s weekly online briefing on Chinese coal, 15:00
PetroChina earnings briefing in HK, 16:00
Qingdao Multinationals Summit, day 2
EARNINGS: Cnooc, BYD, Gotion, Ganfeng Lithium, CNGR, Chalco, Jiangxi Copper

Thursday, Aug. 29:

Baosteel online earnings briefing in HK, 14:00
Cnooc earnings briefing in HK, 16:15
Qingdao Multinationals Summit, day 3
EARNINGS: Longi, Tongwei, Windey, GCL-Poly, Hesteel, Shandong Steel, Maanshan Steel, GEM, Ningbo Shanshan, China MCC, Cosco

Friday, Aug. 30

China weekly iron ore port stockpiles
CMOC online earnings briefing, 10:00
Shanghai exchange weekly commodities inventory, ~15:00
EARNINGS: Tianqi, Jinko, JA Solar, Ming Yang, Yangtze Power, Three Gorges, Shenhua, Angang Steel, Citic Ltd.

Saturday, Aug. 31

China’s official PMIs for August, 09:30

Sunday, Sept. 1

China International Steel Congress in Shanghai, (through Sept. 2)

Listen on Zero: The Chinese Activist Who Mapped the Country's Pollution Problem

–With assistance from Rob Verdonck.

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(Bloomberg) — BHP Group Ltd. offered a cautious near-term outlook for copper, while sticking to the widely-held view that the energy transition metal is eventually headed for severe shortages and much higher prices.

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The world’s second-biggest copper supplier cut its forecast for Chinese demand this year, and warned of a modest global surplus through the end of 2025, in an overview of commodities markets released with its full-year earnings. But it predicted a “fly-up pricing regime” later this decade, driven by a prolonged worldwide deficit.

Listen to the Bloomberg Daybreak Europe podcast on Apple, Spotify or anywhere you listen.

Copper jumped as much as 1.8% on the London Metal Exchange on Tuesday, to the highest since July 18.

BHP’s commentary reflects softening expectations across metals markets as China grapples with slowing economic growth and a protracted property crisis. Copper prices surged to a record in May before retreating as the Chinese demand outlook deteriorated. Consumption there will grow 1% to 2% this year, down from 6% in 2023, BHP said.

“This is a downgrade to our prior expectations, which reflects the ongoing shift in the Chinese real estate market,” the miner said in the overview. There’s likely to be more volatility across commodity markets over the next 18 months, it said.

BHP reiterated its view that, over the longer term, global copper supply will struggle to match a looming wave of demand from renewable energy, data centers and a vast expansion in power grids. The metal has been the subject of eye-watering price forecasts because there are few major new mines in the pipeline.

“With the deficit conditions we anticipate in the final third of the 2020s, it’s possible that we enter into a ‘fly-up’ pricing regime, whereby prices disconnect from the cost curve due to systematic excess of demand over supply amid inadequate inventory levels.”

–With assistance from Mark Burton.

(Updates copper price in third paragraph.)

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BHP Group BHP reported a 2% year-over-year increase in underlying attributable profit from continuing operations at $13.7 billion for fiscal 2024 (ended June 30, 2024). The growth was attributed to higher prices and sales volumes in BHP’s iron ore and copper operations, productivity initiatives, cost discipline and favorable raw material costs. This offset the impact of lower energy coal and nickel prices and higher labor costs on profits.

BHP’s underlying earnings per share were $2.70 compared with $2.65 in fiscal 2023. Earnings per American Depositary Share (ADS) were $5.39s, higher than $5.30 in the previous fiscal year. The metric missed the Zacks Consensus Estimate of $5.52. BHP’s each ADS represents two fully-paid ordinary shares.

BHP’s FY24 Revenues Up 3%

Revenues for fiscal 2024 totaled $55.7 billion, which beat the Zacks Consensus Estimate of $54 billion. The top line was 3.4% higher than the prior fiscal year. The improvement was due to higher prices and sales volumes for iron ore and copper compared with the prior fiscal. This was offset by lower energy coal and nickel prices, and lower steelmaking coal volumes following the divestment of Blackwater and Daunia on April 2, 2024.

The Iron ore segment’s revenues rose 13% year over year to around $28 billion and revenues in the Copper segment increased 16% to $18.6 billion. Both segments benefited from higher volumes and prices. The Coal segment’s revenues plunged 30% to $7.7 billion.

BHP Delivers Solid Production Numbers for Iron & Copper

The company’s total iron ore production for fiscal 2024 was a record 260 Mt, up 1% year over year. Western Australia Iron Ore (WAIO) delivered a record iron ore production of 255 Mt (287 Mt on a 100% basis). This reflects solid supply-chain performance with increased capacity unlocked by the record production at South Flank. These gains helped offset the impacts of the continued tie-in activity for the Rail Technology Program 1.

Copper production rose 9% year over year to 1,865 kt, the highest in 15 years. Nickel production was up 2% to 81.6 kt

BHP Witnesses 4% Rise in EBITDA

Underlying earnings before interest, taxes, depreciation and amortization (EBITDA) increased 4% from the prior fiscal to $29 billion. Higher revenues and lower diesel and acid prices were offset by higher labor costs. Productivity initiatives and BHP’s efforts to control costs offset higher labor costs. The underlying EBITDA margin was 54%, flat with the prior fiscal.

For the Iron ore segment, underlying EBITDA was up 13% year on year to $18.9 billion while the Copper segment’s underlying EBITDA increased 29% to $8.6 billion. The Coal segment’s underlying EBITDA plunged 54% year over year to $2.3 billion.

Profit from operations (including exceptional items of $6.1 billion) declined 24% year over year to $17.5 billion.

In fiscal 2024, BHP’s attributable profit (for total operations) declined 39% year over year to $7.9 billion, which included an exceptional loss of $5.8 billion. The figure of $5.8 billion includes a $2.7 billion impairment of Western Australia Nickel and a $3.8 billion charge related to the Samarco dam failure, offset by a gain of $0.7 billion on disposal of the Blackwater and Daunia mines.

BHP’s Cash Flow Improves, Debt Down

Net operating cash flow for fiscal 2024 was $20.7 billion compared with $18.7 billion in fiscal 2023. The improvement was attributed to lower tax and royalty-related taxation finalization payments compared with the prior fiscal. BHP Group reported a free cash flow of $11.9 billion, a significant improvement from $5.6 billion in fiscal 2023.

The company invested $9.3 billion in line with its Capital Allocation Framework. This included $5.9 billion in organic development and $3 billion in maintenance and decarbonization. BHP’s cash and cash equivalents as of June 30, 2024, amounted to $12.5 billion compared with $12.4 billion as of June 30, 2023. Capital and exploration expenditures totaled $9.3 billion, up 31% from the prior fiscal year.

Backed by its solid cash flow, BHP continued to repay debt and as of the end of fiscal 2024, net debt was $9.1 billion compared with $11.2 billion as of fiscal 2023 end.

BHP has budgeted capital and exploration expenditures in fiscal 2024 and 2025 to be $10 billion and $11 billion, respectively.

BHP’s board has announced a dividend of 74 cents per share or a total of $3.8 billion. This translates to a payout ratio of 53%.

BHP’s Production & Unit Cost Guidance for FY25

BHP’s iron ore production guidance for fiscal 2025 is in the range of 255-265.5 Mt. WAIO's production is expected to be between 250 Mt and 260 Mt (282 Mt and 294 Mt on a 100% basis).

The company expects copper production to be within the range of 1,845-2,045 kt. Production guidance for metallurgical coal is in the band of 16.5-19 Mt while the guidance for energy coal is in the range of 13-15 Mt.

Unit cost guidance for WAIO is in the range of $18.00-$19.50 per ton. Escondida unit cost is estimated to be in the band of $1.30-$1.60 per pound. Spence unit costs are expected to be between $2.00 and $2.30 per pound. Copper South Australia’s unit cost is anticipated to be between $1.30 and $1.80 per pound. BMA unit cost is expected to be between $112 and $124 per ton.

BHP Stock’s Price Performance

BHP Group’s shares have fallen 18.4% year to date compared with the industry’s 10.1% decline.

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BHP’s Zacks Rank & Other Key Picks

BHP Group currently carries a Zacks Rank #2 (Buy). Some other top-ranked stocks from the basic materials space are Carpenter Technology Corporation CRS, IAMGOLD Corporation IAG and Eldorado Gold Corporation EGO. CRS, IAG and EGO sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Carpenter Technology’s fiscal 2025 earnings is pegged at $6.06 per share. The consensus estimate for earnings has moved 17% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 15.9%. CRS shares have gained 102.5% year to date.

The consensus estimate for IAMGOLD’s 2024 earnings is pegged at 39 cents per share. The consensus estimate for earnings has moved 44% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 200%. IAG shares have gained 104% so far this year.

The Zacks Consensus Estimate for Eldorado Gold’s 2024 earnings is pegged at $1.32 per share. The consensus estimate for earnings has moved 22% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 430%. EGO shares have gained 37% year to date.

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Nvidia (NVDA)

Nvidia is set to beat previous results when it publishes earnings on Wednesday. For the quarter, the chipmaker is expected to report adjusted earnings per share (EPS) of $0.65 on revenue of $28.7bn (£21.7bn). That works out to a 139% jump in EPS and a 113% increase in revenue compared to the same period a year ago when Nvidia saw EPS of $0.27 and revenue of $13.5bn.

Nvidia is the world leader in AI chip design and software, controlling between 80% and 95% of the market, according to Reuters. And it’s expected to continue to hold that lead as it begins rolling out its next-generation Blackwell line of chips.

The most anticipated results of the quarter will send ripple effects throughout the tech sector as investors look for signs that the AI trade will continue to dominate market conversations into the second half of the year.

Nvidia stock is up more than 163% year to date and 60% in the last six months. Rival AMD’s (AMD) stock price is up 9% year to date and down some 14% over the last six months.

Nigel Green of deVere Group said: “The company has become the undisputed leader in artificial intelligence (AI) chips, a market segment that is poised to reshape industries across the globe. In a world increasingly dominated by AI-driven technologies, Nvidia stands head and shoulders above the competition.

"The company’s cutting-edge GPUs, particularly its Hopper architecture, are driving massive demand, and there is no clear competitor in sight that can match its performance.

“The result? A stratospheric rise in Nvidia’s stock and market cap that has far outpaced broader market gains.”

BHP (BHP.L)

Miner BHP is set to boost copper production after its mainstay iron ore business suffered from China’s economic slowdown.

The FTSE 100 (^FTSE) group said it expects Chinese steel demand to remain depressed in 2024.

Consumption of iron ore has been hammered by a slowdown in China, where fewer buildings are being constructed, dampening demand for steelmaking iron ore. Almost two-thirds of BHP’s revenues come from iron ore, with under one-third coming from copper.

BHP chief executive Mike Henry said: “In the near term, we expect volatility in global commodity markets, with China experiencing an uneven recovery among its end-use sectors. The effectiveness of recently announced pro‑growth policies will be an important contributor for the country to achieve its official 5% growth target.”

BHP’s revenue for the year ending in June rose 3% to $55.7bn, while underlying net profit grew 2% to $13.7bn.

However, its total profit attributable to shareholders fell 39% after a $2.7bn write down in the value of its Australian nickel operations, and a $3.8bn charge related to a dam collapse in Brazil.

The firm also cut its full-year dividend by 14% to $1.46 to reflect higher investment in new projects.

Shares were 1.5% higher at the time of writing.

Ryanair (RYA.IR)

Ryanair shares rose more than 6% on Tuesday after the airline's boss Michael O'Leary said fare decreases will be limited to 5%, reassuring investors who had feared steeper reductions in prices.

Last month the biggest airline in Europe warned that fares could drop by more than 10% as it missed analyst estimates for sales. Shares in the airline plunged 15% last month on the back of the news.

The risk of what O'Leary at the time called an "ugly scenario" of double-digit falls in average fares "looks like it has disappeared."

"While fares were kind of softening during April, May and June, that has levelled out," he said.

Asked if Ryanair was still seeing price resistance when it tried to raise prices on last-minute fares, O'Leary said: "It's not the same price resistance."

Brent Crude oil (BZ=F)

Brent oil prices were steady on Tuesday, stabilising after three consecutive sessions of gains that saw prices climb roughly 7%.

Crude traded at about $81 a barrel after rising 7% in the sharpest three-day rally since April last year, while West Texas Intermediate was near $77.

“These gains were fuelled by expectations of interest rate cuts in the US, which became the dominant market narrative after the Federal Reserve chairman signalled an easing off of the monetary policy brakes," said Ricardo Evangelista, senior analyst at ActivTrades.

"Jerome Powell hinted at a rate cut in September and left the door open for additional cuts before the year's end, bolstering the outlook for economic growth and, consequently, oil demand.”

“Meanwhile, in the Middle East, tensions remain high between Israel, Iran, and its proxies, raising the threat of an all-out war that could severely disrupt the global supply of crude.”

"Adding to supply concerns, the potential closure of oil fields in Libya could, if confirmed, remove more than a million barrels per day from an already tight market.”

“Against this backdrop, with pressures mounting from both the supply and demand sides, there may be room for further gains in oil prices.”

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(Bloomberg) — BHP Group Ltd. will focus on boosting returns from its burgeoning copper portfolio, the world’s biggest miner said on Tuesday, as it bets long-term gains for the crucial new-energy metal will help offset declining returns from iron ore as Chinese demand cools.

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Chief Executive Officer Mike Henry, announcing full-year profit broadly in line with market expectations, underlined the mining giant’s efforts to double down on its own projects and mines — even after appetite for the red metal motivated last month’s acquisition of Filo Corp. jointly with Lundin Mining Corp., and, earlier in the year, the failed $49 billion effort to take over smaller rival Anglo American Plc.

“The Plan A for BHP was never about acquisitions and it wasn’t about that specific opportunity,” Henry told Bloomberg Television, when asked if the company could revive its Anglo bid. “It was about everything that you see in this set of results, which is focusing — first and foremost — on ensuring that we’re getting the most out of our capital.”

In the near-term, though, BHP underlined the impact China’s uneven recovery and volatility in global commodity markets, with iron ore supply outpacing demand into next year as surplus steel floods the market.

“What we’re seeing play out in the market is really a fine balance between steel demand and iron ore supply,” Henry said.

China’s slowing economy and languishing property market are damping demand for metals, especially steelmaking staple iron ore, which accounts for almost two-thirds of BHP’s revenue. The head of China Baowu Steel Group Corp., the country’s biggest steel producer, warned this month the industry faced a situation worse than crises in 2008 and 2015.

Both iron and copper have weakened since the end of the reporting period, potentially signaling more challenging times ahead.

Headline earnings still underscored the continued resilience of the miner’s core iron ore and copper operations. Underlying attributable profit came in at $13.66 billion for the year through June, up 2% from the year earlier and just above analysts’ estimate of $13.49 billion. The company’s share price rose as much as 2.7% in Sydney following the earnings release.

The company spent $9.3 billion in capital and exploration in the period, up 31% from the year before. It aims to expand that spending to $11 billion by fiscal 2026, with two third of the amount on copper and potash.

The red metal currently generates just under 30% of BHP’s sales. Output rose 9% over the year through June, and the company is forecast a further 4% expansion this year, an improvement on peers who have seen less reliable increases.

“What was positive was just the continued focus on copper growth – the amount of options they have in their portfolio and what levers they can eventually pull,” RBC Capital Markets analyst Kaan Peker said. While concerns remained around China’s slowdown in iron ore and steel demand, there was a sense from BHP “that maybe the demand picture isn’t as negative as it seems,” he added.

Potash Play

BHP’s overall revenue rose 3%. Higher sales volumes and relatively strong prices for iron ore and copper were partially offset by lower coal prices and a crash in nickel, caused by a surge of cheap Indonesian material that ultimately prompted the miner to shutter its Nickel West business.

Potash may prove another bright spot for BHP. Its $14 billion potash mine in Canada’s Saskatchewan region is expected to produce more than 4 million tons of the crop nutrient annually from 2026. Last year, BHP approved an expansion to more than double the production.

The Melbourne-based company is looking at a potential expansion of its Western Australia iron ore business to lift output to 330 million tons annually, compared with 260 million tons in the year just completed. Henry said that was contingent on market factors, and that China’s steel demand had plateaued.

“Some sectors of the Chinese economy that drive steel demand, such as shipbuilding and the auto industries, are actually performing quite healthily,” Henry said.

BHP is the latest diversified miner to demonstrate heft can, for now, help weather the China property storm. Rio Tinto Group’s first-half profit was slightly higher than a year earlier. Vale SA — the world’s No. 2 iron ore producer — posted second-quarter earnings that were only just below analyst estimates.

BHP will pay a final dividend of 74 cents per share, compared with 80 cents a year ago.

–With assistance from James Mayger, Haidi Lun and Sybilla Gross.

(Updates with Henry comments in 3rd, 5th paragraphs; analyst comment in 10th)

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By Melanie Burton and Sameer Manekar

MELBOURNE (Reuters) -BHP Group will focus on growing its copper business through existing and incoming projects after its failed attempt to buy Anglo American, it said as it reported a better-than-expected 2% rise in annual underlying profit.

The world's biggest listed miner is pushing hard to expand in copper, given the commodity's outsize role in the energy transition and a tougher outlook for its top revenue generator, iron ore, as China's economic growth slows and supply rises.

BHP walked away in May from its blockbuster $49 billion bid for Anglo that would have significantly boosted its copper business and is now turning to other options.

"I was very clear at the time, it wasn't Plan A for us. Plan A is everything that you see outlined in these results," BHP CEO Mike Henry told reporters. "We continue with Plan A."

BHP unveiled more details around its spending and growth plans for key copper provinces in Chile, South Australia and Argentina after it posted an underlying attributable profit for the year ended June 30 of $13.66 billion, which excludes exceptional items.

That beat a Visible Alpha consensus of $13.26 billion and was ahead of the $13.42 billion profit a year ago, though on a bottom-line level it took a $5.7 billion hit from impairments to its nickel business in Western Australia and the 2015 dam collapse at Samarco in Brazil.

BHP shares were about 2% higher in early trade, outpacing the flat Australian benchmark index.

"They have clearly laid out capex and growth expectations for copper where they are still looking at copper as a key commodity, clearly," said Andy Foster, a portfolio manager at Argo Investments. "It's just been so hard to execute large-scale acquisitions so you have to make the most of your existing assets and then look at other opportunities."

Copper accounts for about 30% of the miner's profits but that is set to increase. In South Australia it is assessing options to produce more than 500,000 metric tons of copper annually in the early 2030s, up from 322,000 tons in the last financial year.

BHP said last month it would jointly take over Filo Corp for its copper growth projects near the Argentine-Chilean border, paying C$4.5 billion ($3.25 billion) with Canada's Lundin Mining.

UK regulations bar BHP from making another offer for Anglo until November, should it still want to do so. Henry said BHP had no interest in a separate purchase of Anglo's coking coal assets.

Still, BHP said it was keeping its balance sheet flexible.

"We are comfortable to move above our net debt target temporarily to execute value accretive opportunities in the portfolio," the miner said.

Net debt stood at $9.1 billion as of June 30, roughly at the midpoint of its target range of $5 billion and $15 billion.

BHP's profit was underpinned by record iron ore output for a second year and resilient prices, which offset weak coal prices and the sale of two of its coal mines.

The miner said the outlook for iron ore in the current financial year would depend in part on how quickly and effectively Chinese policies were able to stabilise its weak property sector as well as Beijing's approach to regulating steel production.

BHP declared an interim dividend of 74 cents per share, for a full-year dividend of $1.46 per share. That was its lowest full-year dividend since the 2020 financial year but still among the top four it has declared in its history.

(Reporting by Sameer Manekar in Bengaluru and Melanie Burton in Melbourne; Editing by Arun Koyyur and Jamie Freed)

Earnings season is winding down but investors will still have plenty to watch this week as key companies across various sectors provide updates that could offer valuable insights into market trends.

In the tech sector, AI darling Nvidia is expected to offer a glimpse into the ongoing impact of the artificial intelligence (AI) hype on the semiconductor industry, potentially revealing whether enthusiasm for AI is translating into tangible growth.

Meanwhile in London, financial services firm Prudential will show investors if it has managed to turn around its performance. Shares in the company have slumped amid less than stellar performance of the Hong Kong and China economies.

CrowdStrike will also report its results in the cybersecurity arena, with investors eager to see how the company behind the recent global outage is performing.

In the sneaker fashion world, Foot Locker is seeing analysts upgrading its stock ahead of earnings but Wall Street still expects a quarterly loss.

Here's what to look out for:

Nvidia (NVDA) — Reports second-quarter results on Wednesday 28 August

All eyes will be on Nvidia (NVDA) this week, as the chip giant at the heart of the AI boom, is set to release its second-quarter results on 28 August.

Not only does Nvidia hold an 80% to 95% share of the market for high-powered AI chips, according to Reuters, but it is also the world’s third-largest company by market capitalisation at $3.04tn (£2.31tn), having briefly held the top spot back in June.

The AI darling is the single best performer in the S&P 500 (^GSPC) index and a leading member of the Philadelphia Semiconductor index — known as the SOX (SOX=F) — point out AJ Bell’s head of financial analysis Danni Hewson and Dan Coatsworth, investment analyst for the platform.

Nvidia is also part of the so-called 'Magnificent Seven', which alongside other tech heavyweights including Apple (AAPL) and Microsoft (MSFT), is a group of stocks that make up more than a third of the S&P 500’s stock market value and a fifth of the FTSE All-World (AW01.FGI) equity index’s market capitalisation.

“These seven names have gone a long way to helping equity markets go higher, so if they stumble then the effects could be felt widely,” say Hewson and Coatsworth.

Nvidia shares are up 149.87% year-to-date, though the stock sold off heavily in July and into early August. The share price has recovered some ground since then but fell 3% in Thursday’s trading session ahead of the highly anticipated earnings report next week.

“From a fundamental, earnings point of view, Nvidia has demolished consensus estimates and raised guidance for each of the past five quarters, which helps to explain its stellar share price performance,” say Hewson and Coatsworth.

Nvidia said it expects revenues of $28bn for the second-quarter, which is more than double the $13.5bn it reported for the same period last year. If Nvidia CEO Jensen Huang offers any steer on the third quarter, Hewson and Coatsworth say the current consensus forecast on revenue is $30.7bn, versus $18.1bn for Q3 last year.

Based on Huang’s guidance for gross margins, operating expenses and tax charges, Hewson and Coatsworth said this implies a net profit of $15bn for the second quarter, which is more than double the figure reported last year, but broadly flat on the previous quarter. They said this also suggests headline earnings per share (EPS) of $0.63 for Q2, up from $0.61 in the first quarter.

Looking ahead, they said that analysts will be keeping an eye out for comments from Huang on reported delays in the launch of Nvidia’s new Blackwell chips.

“Production of Blackwell was due to ramp up in the second half of this year, as Nvidia looks to maintain its technological lead by quickly improving upon the Hopper chipset,” Hewson and Coatsworth said.

Prudential (PRU.L) — Reports first-half results on Wednesday 28 August

Another company reporting on Wednesday is financial services firm Prudential, which has seen its shares fall by nearly a third over the past year, slumping to 12-year lows.

AJ Bell’s Hewson and Coatsworth said that the shares have been “dragged down by markets’ disappointment with how the economies of Hong Kong and China are failing to show markedly improved momentum after the conclusion of their lengthy lockdowns imposed because of Covid-19.”

They explained that Prudential is now a play on demand for financial services in Asia and Africa, following the spin-off of fund manager M&G (MNG.L) in 2019, a fundraising in Hong Kong in 2021 and its 2022 demerger from Jackson Financial (JXN).

“Prudential’s long-term strategy is to position itself for both population growth as well as increased prosperity and the rise of the middle class, as this is potentially the sweet spot for increased demand for financial products and services,” Hewson and Coatsworth said.

Hong Kong was Prudential’s most profitable market in 2022, followed by Singapore, Mainland China, Malaysia and Indonesia, with it highlighting India, Vietnam, Thailand, Taiwan and the Philippines as high-growth markets.

Prudential’s CEO Anil Wadhwani, who took the reins earlier last year, set out two new financial objectives, one of which was to achieve a compound growth of 15% to 20% in new business profit between 2022 and 2027.

New business profit jumped 45% to $3.1bn in 2023, but Hewson and Coatsworth note that this was flat in the first quarter of 2024 on a constant currency basis, despite the firm pointing to a headline figure of 11% growth “excluding economic impacts” on a constant currency basis.

Another metric that they said would be in focus is Prudential’s operating profit, which on an adjusted basis came in at $2.9bn in 2023, up 8% on the previous year.

Prudential paid out a dividend of 20.47 cents (16.5p) per share in 2023, with Hewson and Coatsworth saying that analysts expect a 6% increase in these distributions to the equivalent of 17.5p a share. The company announced a 2023 first interim dividend of 6.26 cents, or 5.16p, per share.

Hewson and Coatsworth said that another figure that investors will be looking at is Prudential’s annual premium equivalent, as a measure of new business written. This increased by 37% to $5.9bn in 2023 and grew by 7% on a constant currency basis in the first quarter of this year, “thanks to a tough base for comparison in Hong Kong and China and a slowdown in Vietnam".

CrowdStrike (CRWD) – Reports second quarter results on Wednesday 28 August

CrowdStrike is set to report its second-quarter financial results on Wednesday 28 August with the market keenly focused on the aftermath of the July IT outage that has significantly impacted the company’s valuation.

The cloud-based security company is expected to post quarterly earnings of $0.98 per share in its upcoming report, which represents a year-over-year change of +32.4%, according to Zachs Research. Revenues are expected to be $958.66m, up 31% from the year-ago quarter.

The cybersecurity leader has seen its market value sharply decline after its involvement in a Microsoft-related IT disruption that caused widespread chaos. The incident, attributed to “a single content update for Windows hosts”, led to severe disruptions across various sectors, including airlines, emergency services and media outlets globally, according to CrowdStrike president George Kurtz.

In the wake of the outage, businesses affected have initiated legal action against both CrowdStrike and Microsoft. Notably, Atlanta-based Delta Air Lines (DAL) has filed claims, citing losses ranging from $350m to $500m after being forced to cancel more than 6,000 flights.

As investors await CrowdStrike’s earnings call, they are particularly interested in how the ongoing legal challenges will impact the company’s financial health. However, Wedbush analysts have suggested that the financial damage may be less severe than initially anticipated.

According to legal experts cited by Wedbush, CrowdStrike’s potential liabilities from Delta’s lawsuit are likely to be in the "single-digit" millions, thanks to favourable user contracts that limit the company’s exposure to claims for revenue losses and liability.

Despite these reassurances, there are concerns that the reputational damage from the outage could lead to a loss of future business, a risk that may weigh on CrowdStrike's long-term prospects.

Citi (C) analysts said that CrowdStrike won't come out of the incident "unscathed" given higher discounts, lower negotiating leverage, and litigation costs it now faces.

Foot Locker (FL) – Reports second quarter results on Wednesday 28 August

Citi has revised its outlook on Foot Locker, increasing the price target from $27 to $33, while maintaining a Neutral rating on the stock. This change comes in anticipation of Foot Locker’s second-quarter earnings report on Wednesday before the US bell.

Citi's analysis say Foot Locker may outperform consensus expectations for both sales and earnings per share in the second quarter.

Its optimism is driven by stronger-than-expected comparable store sales and gross margins, bolstered by the robust performance of several key brands in Foot Locker’s portfolio, including Adi Terrace, New Balance, Hoka, and On.

Despite underperformance from Nike (NKE), Foot Locker’s largest brand, Citi believes the retailer will show a positive inflection in comparable sales for the second quarter, recovering from last year’s promotional pressures that negatively impacted gross margins.

The retailer is expected to report a quarterly loss of $0.09 per share, reflecting a year-over-year decline of 325%. However, revenues are projected to reach $1.88bn, marking a 0.9% increase compared to the same quarter last year, according to Zachs Research.

Foot Locker’s management is expected to reaffirm its fiscal year 2024 guidance, though third-quarter projections may come in below consensus due to anticipated weaker gross margins.

Recent analyst actions showcase a range of views on Foot Locker’s prospects. Following a disappointing first-quarter performance in 2024, Morgan Stanley downgraded the stock from Equalweight to Underweight, lowering the price target to $18 due to a more cautious outlook for 2024 (EPS, driven by expectations of a decline in both top-line growth and gross margins).

Argus also maintained a Hold rating on Foot Locker, expressing caution about near-term earnings pressure as the company navigates a strategic transformation. Conversely, Jefferies, Barclays and Telsey Advisory Group have raised their price targets to $26, $27, and $27, respectively, recognising Foot Locker’s recent performance.

Other companies reporting next week include:

Monday 26 August

No major companies reporting

Tuesday 27 August

CNOOC (600938.SS)

BHP (BHP.L)

Vinci (DG.VI)

Wednesday 28 August

Hochschild Mining (HOC.L)

Cosco Shipping (CICOF)

Air China (AIRYY)

China Construction Bank (601939.SS)

Wuliangye Yibin (000858.SZ)

Ageas (AGS.BR)

Brunello Cucinelli (8BU.F)

NetApp (NTAP)

Bath & Body Works (BBWI)

Abercrombie & Fitch (ANF)

Campbell Soup (CPB)

Kohl’s (KSS)

JM Smucker (SJM)

Thursday 29 August

South32 (S32.AX)

Qantas (QAN.AX)

Pernod Ricard (RI.PA)

Delivery Hero (DHER.HM)

Friday 30 August

Dell (DELL)

Marvell (MRVL)

Dollar General (DG)

Brown-Forman (BF-B)

Best Buy (BBY)

Birkenstock (BIRK)

You can read Yahoo Finance's full calendar here.

Download the Yahoo Finance app, available for Apple and Android.

BHP Group Limited

REGINA, Saskatchewan, Aug. 21, 2024 (GLOBE NEWSWIRE) — The Regina Food Bank and BHP are pleased to announce a partnership to ensure the financial sustainability and programming impact of the recently created BMO ASAHTOWIKAMIK Food Hub. Through the partnership BHP will invest $350,000, designating BHP as the reconciliation partner. Funds will go towards the food sovereignty programme and a mural in the Food Hub created by local Indigenous artist Chantel Yuzicappi, from Standing Buffalo First Nation in Treaty 4 Territory.

The Regina Food Bank feeds over 17,000 people per-month, of which 23% are of self-identified Indigenous decent. Food insecurity is linked to lower education, health and economic outcomes; and addressing it is in-line with the Truth & Reconciliation Calls to Action, particularly those aligned with youth programming, language, education and health.

The Food Hub is a national first, providing food bank services with a grocery store feel. The new approach means that for the first time in 40 years, client’s will be able to choose the food their family needs from a culturally diverse, nutritious selection. The food sovereignty programme plays an important role in this, supporting initiatives such as buffalo harvests and Indigenous urban agriculture.

The space has been purposefully created as a vibrant gathering place for the community with a focus on making it a welcoming environment for Indigenous community members with the inclusion of Indigenous languages, a reconciliation room to host programming, and the art created by Ms.Yuzicappi.

The name ASAHTOWIKAMIK is the Cree meaning for a “feeding lodge”. The name was gifted through ceremony by Elder Murray Ironchild of Piapot First Nation to the Regina Food Bank for their new location. Elder Ironchild and local Indigenous community members asked that the new Food Hub do more than provide food by focusing on partnerships, programming and giving a hand-up.

BHP’s investment will do just that according to John Bailey, CEO, Regina Food Bank, “We want to thank BHP for helping us advance food sovereignty programming and create a culturally friendly and respectful environment for all. Together, and with BHP’s help, we are providing a new model for reconciliation and feeding our community”.

“At BHP we are very pleased to support the growing need for food bank services and important efforts towards reconciliation in the community in a way that touches on day-to-day experiences and builds stronger, more dignified engagements,” said Karina Gistelinck, BHP Potash Asset President. “Partnering with the Food Bank in this way was a natural fit. We recently released our Canada Indigenous Partnerships Plan. This investment is the first reconciliation-focused investment under the new Plan; and one that we hope will be the start of many new partnerships. We applaud the Regina Food Bank for their innovation approach.”

The BMO ASAHTOWIKAMIK Community Food Hub opened to clients on August 16th. To learn more visit https://www.reginafoodbank.ca/food-hub-campaign.

About the Regina Food Bank

The Regina Food Bank is a charitable community-based organization working to fight food insecurity through nutritious food distribution, education, and support programs.

For over 40 years we have worked to restore dignity, health and hope for our clients. We also build community – rallying the community to make Regina a more fair, caring, and dynamic city. The Food Bank feeds over 15,000 people a month, making it the largest food security organization in Southern Saskatchewan.

About BHP BHP is a global resources company with its Canadian operational headquarters in Saskatoon, Saskatchewan and global business development headquarters in Toronto. BHP has a global workforce of approximately 80,000 people working in locations across Canada, Australia, Asia, the UK, US and Latin America. BHP produces commodities essential for global decarbonization, economic development and food security including copper, nickel, iron ore, metallurgical coal and is developing the Jansen potash project in Saskatchewan, Canada. BHP recently released it's Canada Indigenous Partnerships Plan which outlines how it’s global Indigenous Peoples Policy Statement will be operationalised in Canada and the ongoing work to advance existing and new relationships with Indigenous peoples in Canada. Further information on BHP can be found at: bhp.com.

For media inquiries, please contact:

Regina Food BankDavid Froh, Vice PresidentRegina Food Bank 306-550-4823 dfroh@reginafoodbank.ca

BHPMegan HjulforsMedia Relations403-605-2314

Investing.com — Gold prices rose Tuesday, climbing to new record highs, helped by dollar weakness as traders grew more convinced that the Federal Reserve will begin cutting interest rates in September.

At 08:15 ET (12:15 GMT), spot gold rose 0.9% to $2,526.43 an ounce, while gold futures climbed 0.9% to $2,564.95 an ounce.

Gold hits record highs on rate cut bets

Spot prices have hit new highs amid growing conviction that the Fed will begin cutting rates from September.

Traders are pricing in a 76% chance the Fed will cut rates by 25 basis points at the next Fed meeting, and a 24% chance for a 50 bps cut, CME Fedwatch showed.

Lower rates bode well for gold, given that they reduce the opportunity cost of investing in non-yielding assets.

An address from Fed Chair Powell, on Friday, is expected to offer more cues on the bank’s plans to cut rates.

"Gold prices are up 22% so far this year amid geopolitical uncertainties, expectations of interest rate cuts from the Fed and strong buying appetite from central banks," said analysts at ING, in a note.

"Looking ahead, we expect gold to stay near record highs on expectations that the U.S. Fed is getting closer to an interest rate cut. We believe that gold’s focus will remain firmly on the scope and timing of the Fed’s likely move to cut rates, with Jackson Hole later this week potentially providing some further clarity on the path the Fed may take."

Other precious metals also climbed higher, with platinum futures rose 0.6% to $968.65 an ounce, while silver futures rose 1.8% to $29.823 an ounce.

Copper dips as Escondida strike averted

Among industrial metals, copper prices edged higher Tuesday, with the benchmark copper futures on the London Metal Exchange climbed 0.2% to $9,268.50 a ton, while one-month copper futures rose 0.4% to $4.1980 a pound.

BHP reached an agreement with labor unions at the Escondida mine on Sunday, averting a potential strike that stood to severely limit global copper supplies.

Escondida accounts for 5% of global copper supplies, with a 40-day strike at the mine in 2017 having greatly boosted copper prices then.

Beyond supply disruptions, however, copper prices were nursing steep losses through August amid growing anxiety over weakening demand, especially in top importer China.

(Ambar Warrick contributed to this article.)

Markets are now awaiting more cues on interest rates from the Federal Reserve, with Chair Jerome Powell set to speak at the Jackson Hole Symposium on Friday.

Gold prices hit new highs on weak dollar; Powell speech in focus

Oil prices edge lower; Israel-Hamas ceasefire in spotlight

UBS targets platinum price of USD 1,100/oz by mid-2025

Santiago (Reuters) -The union at Chile's Escondida copper mine, the world's largest, signed a deal on Sunday with BHP, ending a strike that could have threatened global supplies of the red metal.

The three-year deal included changes in labour conditions such as "initiatives to optimize shift changes, increase equipment utilization and compliance with the 40-hour law," BHP said in a statement announcing the deal.

An internal union message, reviewed by Reuters, asked members to return to work.

The mine's powerful union had gone on strike on Tuesday over payment disputes and then come to a preliminary agreement on Friday that had suspended the strike.

Earlier in the day the union had sent a memo to members warning it might re-start the strike if the company did not "rectify its position" over contract talks.

BHP's statement didn't provide any further details on the deal with the union. But earlier in the week, sources at the company and the union told Reuters that BHP offered workers around $32,000 as a bonus and an additional $2,000 in soft loans.

BHP had previously offered a $28,900 bonus per worker, compared with the union's demand of 1% of shareholder dividends from the mine, or roughly $35,000 to $36,000 per member.

LME copper prices traded up 1 percent at $9,211 on Monday amid a firmer tone across metals.

(Reporting by Fabian Cambero; Writing by Sarah Kinosian; Editing by Tom Hogue and Shri Navaratnam)

(Bloomberg) — BHP Group and union leaders in Chile reached a preliminary wage agreement on Friday, setting the stage for a resumption of normal production at the world’s biggest copper mine. Prices dipped.

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If ratified, the accord will end a stoppage that has disrupted production at a site accounting for about 5% of the world’s mined copper at a time of tightness in the supply of concentrate — the raw material used to feed smelters.

Leaders of the main union at the Escondida operation agreed to temporarily lift a strike in order to present the new proposal to their 2,400 members, according to company and union statements. If they accept, the two sides will sign a new labor contract. If they don’t, the strike will resume at 8 p.m on Sunday.

Escondida churns out more than 1 million metric tons a year, making it by far the biggest supplier of copper. The preliminary accord will come as a relief given the mine has been the scene of lengthy stoppages in the past, including a 44-day strike in 2017.

Workers downed tools Tuesday after failing to reach a wage deal with management in the obligatory phase of collective bargaining. Since then, the two sides have been engaged in on-again, off-again discussions. Negotiations dragged into the early hours of Friday before finally yielding a breakthrough. The proposal includes an immediate signing bonus of about $32,000 each, plus a more than $2,000 soft loan, according to people briefed on the matter.

Supply risks at Escondida have supported copper futures in recent days, but a modest decline in prices after the wage deal signaled that investors have not been betting heavily on a protracted stoppage.

“Strikes usually don’t tend to be long-lasting in Chile, and so the market may have been reluctant to react to it too much in the early stages,” Michael Widmer, head of metals research at Bank of America, said by phone. “The bigger issue right now is how we’re doing on the demand side, and that’s probably why the market hasn’t focused on it so much.”

Copper prices fell as much as 1.1% on the London Metal Exchange after the announcement, before paring declines to 0.4%. Still, the metal capped a weekly gain of 2.8%, breaking a five-week run of losses. Resilient US data this week helped to allay fears about a downturn in the world’s top economy.

–With assistance from Mark Burton and Paul-Alain Hunt.

(Adds details of deal in fifth paragraph)

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By Fabian Cambero

SANTIAGO (Reuters) -The main union at BHP's Escondida copper mine in Chile agreed to management's sweetened wage offer on Friday, leading the union to suspend its strike and easing concerns about global supplies of the metal.

The union, which represents about 2,400 workers, began striking on Tuesday at Escondida, the world's largest copper mine, after failing to reach a deal over pay. The strike had started to push up global copper prices.

But on Friday, BHP said the two sides reached an agreement after resuming talks. Sources at the company and the union told Reuters that BHP offered workers around $32,000 as a bonus and an additional $2,000 in soft loans.

BHP had previously offered a $28,900 bonus per worker, compared with the union's demand of 1% of shareholder dividends from the mine, or roughly $35,000 to $36,000 per member.

"BHP and Union No. 1 have come to an agreement for a collective contract proposal. Along with that, it was agreed to suspend the strike," BHP said.

In a statement, the union said the contract offer had overwhelming support from its members and the deal would be signed.

"I feel this is the greatest recent union victory in terms of results," said Marco Lopez, a lawyer for the union.

"Not just because of the economic part, but substantial improvements in historic demands we hadn't been able to achieve (before)."

Andres Gonzalez, head of mining analysis at Plusmining consultancy in Santiago, said the deal could have an impact beyond Escondida.

"The large sums in this negotiation could mark a precedent not just for Escondida, but for all of Chile's mining industry," Gonzalez said, adding that the industry will have to think strategically about how to conduct future negotiations.

Gonzalez said, however, that the strike's suspension was a good sign not just for global markets, but also for Chile's economy since Escondida represents about 3% of the country's GDP and around 5% of the world's copper supply.

Copper prices initially fell after the news before recovering and were up 0.3% at $9,177.5 per metric ton after hitting a session low of $9,047. The metal, used in power and construction, headed to its first weekly gain in six weeks – of 3.5% – as the strike had sparked concerns about supply disruptions.

(Reporting by Fabian Cambero in SantiagoAdditional reporting by Polina Devitt in LondonWriting by Daina Beth Solomon and Alexander VillegasEditing by Frances Kerry and Rod Nickel)

OVERLAND PARK, Kan., August 16, 2024–(BUSINESS WIRE)–Compass Minerals (NYSE: CMP), a leading global provider of essential minerals, received written notice on August 15, 2024 from the New York Stock Exchange (NYSE) that, because the company has not yet filed its Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 (the Report) with the Securities and Exchange Commission (SEC), the company is not in compliance with the continued listing requirements under Section 802.01E of the NYSE Listed Company Manual (Section 802.01E), which requires NYSE-listed companies to timely file all periodic reports with the SEC.

The company’s noncompliance with Section 802.01E has no immediate effect on the listing of the company’s securities on the NYSE. Compass Minerals plans to avail itself of the process provided by the NYSE to regain compliance. The company is working diligently to file the Report as soon as possible.

As previously reported by Compass Minerals in its Notification of Late Filing on Form 12b-25, filed with the SEC on Aug. 9, 2024, the company was unable to file the Report within the prescribed time period without unreasonable effort or expense as a result of pending restatements of its (i) unaudited financial statements included in its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023, (ii) audited financial statements included in its Annual Report on Form 10-K for the period ended Sept. 30, 2023, (iii) unaudited financial statements included in its Quarterly Report on Form 10-Q for the quarterly period ended Dec. 31, 2023 and (iv) unaudited financial statements included in its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024.

About Compass Minerals

View source version on businesswire.com: https://www.businesswire.com/news/home/20240816857932/en/

Contacts

Media Contact Rick AxthelmChief Public Affairs and Sustainability Officer+1.913.344.9198MediaRelations@compassminerals.com

Investor Contact Brent CollinsVice President, Investor Relations+1.913.344.9111InvestorRelations@compassminerals.com

By Fabian Cambero

SANTIAGO (Reuters) – A strike at mining giant BHP's huge Escondida mine in Chile entered its third day on Thursday, bolstering global copper prices as an ongoing standoff between the company and workers starts to spread worries about supply of the red metal.

BHP and the worker union held an initial meeting on Wednesday in a bid to defuse the strike but failed to make a breakthrough that would allow the restart of formal talks, with miners digging in as they seek a larger share of profits.

Benchmark three-month copper on the London Metal Exchange was up over 2.2% to $9,169 per metric ton on Thursday, and various mining shares like Rio Tinto, Southern Copper and Freeport-McMoRan rose as well.

Escondida is the world's largest copper mine, accounting for nearly 5% of global supply in 2023, and the union on strike has in past years forced the firm to halt operations and declare force majeure, meaning it can't fulfill its contracts.

On Wednesday, BHP said operations were continuing under a contingency plan while the union said the strike was keeping the Los Colorados concentration and electrowinning plants offline.

The two sides have both signaled a willingness to returning to formal talks but remain at loggerheads over the conditions. BHP had asked the union to pause its strike to resume negotiations, a demand the union refused.

Hundreds of workers have also set up camp at Puerto Coloso, BHP's exclusive port, which also houses its desalination plants.

(Reporting by Fabian Cambero; writing by Alexander Villegas; editing by Jonathan Oatis)

(Bloomberg) — Copper rose for a second day as traders weighed bearish Chinese economic data against labor disruptions at the world’s biggest mine.

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Prices rose by roughly 2% in London, building on Wednesday’s advance. China’s economic malaise extended into the third quarter, while attempts to resolve a conflict between workers and BHP Group at the world’s biggest copper mine, Escondida in Chile, faltered.

“The risk of unplanned disruptions remains high,” ANZ Group Holdings Ltd. analysts including Daniel Hynes said in a note. “Several mines in Chile, representing approximately 900 kilotons of copper or 4% of global supply, have yet to finalize wage discussions,” he said.

The bank sees the market deficit increase in the coming months, balancing out potentially weaker demand.

China’s industrial output rose 5.1% in July, down from June’s 5.3%. Retail sales climbed 2.7%, government data showed on Thursday, broadly in line with forecasts.

The country’s home-price downturn abated in July with new-home prices falling less, as the government’s most forceful effort to revive the market begins to have an effect. The property crisis has been a major drag on metals demand.

Thursday’s data also showed Chinese aluminum output hit a record high for a third month as smelters ramped up production after more power and new capacity came online.

Copper rose 2% to $9,150.50 a ton on the London Metal Exchange at 3:18 p.m. local time. Prices hit $8,714 a ton on Aug. 5, the lowest since March. All metals gained on the LME, with aluminum up 1% to $2,359 and nickel up 0.8%.

–With assistance from Sana Pashankar.

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(Bloomberg) — The latest attempt to resume negotiations between BHP Group and striking Chilean copper miners broke down as the two sides failed to agree on conditions, according to the union.

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With a strike at world No. 1 copper mine Escondida in its second day, union leaders and company representatives sat down for a voluntary mediation session in northern Chile on Wednesday.

One of BHP’s conditions for continuing the talks was a suspension of the strike involving about 2,400 workers. To do so, leaders required approval by members, a process that couldn’t have been completed by BHP’s deadline of 2 p.m. local time, the union said. “We regret the position of the company, which has refused to talk without conditions,” it said.

In response, BHP said union leaders didn’t agree to suspend the strike: “The company maintains its willingness to dialog and complete this process in a manner satisfactory.”

The stoppage has disrupted production at a site that accounts for about 5% of the world’s mined copper at a time of tightness in the supply of concentrate — the raw material used to feed smelters. Copper futures were little changed in London on Wednesday.

While BHP says operations at Escondida continue, the Melbourne-based firm hasn’t quantified the impact on output. The mine has been the scene of lengthy stoppages in the past, including a 44-day strike in 2017. In February of that year, production plunged to less than a quarter of normal levels, government data show.

Wednesday’s impasse is the latest in a dramatic chain of events over the past three days at Escondida.

On Monday, the final day of mandatory mediation, the union accused BHP of bad faith by going public with a new offer before it had been discussed. The company said it did so after union negotiators failed to show up for talks. The ensuing all-night, last ditch effort to reach a deal proved unsuccessful, prompting workers to down tools.

People with knowledge of the matter told Bloomberg that the two sides held discussions on Tuesday, although publicly BHP and the union said late in the day that there were no official negotiations.

In the meantime, BHP said it removed striking employees from the mine site as the company set in place a contingency plan, using workers that are not part of the collective bargaining process as it is entitled to do.

In a statement earlier Wednesday, the union accused BHP of engaging in “serious anti-union practices” by resorting to replacement personnel to help ship out copper and process ore. Members have access to enough funding to sustain the stoppage for “a very long period,” the union said.

–With assistance from Paul-Alain Hunt.

(Adds company comment in fourth paragraph)

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By Fabian Cambero

SANTIAGO/ANTOFAGASTA (Reuters) -A striking union at BHP's huge Escondida copper mine in Chile has rejected a company request to pause its action and come back to the negotiation table, with workers digging in as they seek a larger slice of profits in contract talks.

The union began a strike on Tuesday at Escondida, the world's largest copper mine, after contract negotiations collapsed, a move which could affect production at the mine and global prices if no quick resolution is found.

BHP and the union held a preliminary meeting on Wednesday to try to close the gap between the two sides and get back to formal talks, but the attempt failed, both sides said.

"The company suggested to the union the option to pause its strike until 8pm today, to resume talks," BHP said in a statement, indicating it was open to boosting its offer. "The union did not agree to the temporary suspension of the strike."

The union in its own statement accused the company of "anti-union" practices by replacing workers and said that BHP had imposed too many conditions on restarting talks.

"The demands and conditions of the company made it impossible to open talks," it said, citing a tight deadline from the company which didn't give enough time to consult its members.

The union added that the strike was keeping the Los Colorados concentration and electrowinning plants fully offline. BHP said the mine continued operating under a contingency plan.

"The strike is only effective for workers who are part of the collective bargaining payroll, not workers from other groups, unions, collaborating companies and minimum services approved by the authority," it said.

A few hundred workers began building an encampment at Puerto Coloso in the northern city of Antofagasta on Wednesday, BHP's exclusive port for shipments, which also houses its desalination plants, according to a Reuters witness.

A report by BTG Pactual, a Brazilian investment bank, said that BHP could lose between $25 million and $30 million a day if the strike goes on like the 2017 strike that lasted 44 days. It added that the strike hurt Chile's GDP.

(Reporting by Fabian Cambero in Santiago; Cristian Rudolffi in Antofagasta; Writing by Daina Beth Solomon and Alexander Villegas; Editing by Jonathan Oatis and David Holmes)

(Bloomberg) — BHP Group workers in Chile rejected the company’s wage offer at the close of regular talks, thrusting the process into a final mediation phase in a bid to avoid a strike at the world’s biggest copper mine.

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Members of the main union at the Escondida mine voted against the terms of a new wage contract, according to a statement from the group late Thursday.

In a statement, BHP said that operations continue to function normally and that the company will request the mandatory mediation period allowed under Chile’s collective bargaining rule before a strike can begin. That period includes five business days of mediation, which can then be extended for another five days if both sides agree.

Copper traders, investors and rival producers are paying close attention to the labor talks at Escondida. The mine churns out more than 1 million metric tons a year, about 5% of all the world’s mined copper, easily making it the biggest single supplier.

The negotiations come at a time of global tightness of copper concentrate — the raw material produced at Escondida and used to feed smelters — even though the market for refined metal is well supplied for now. Benchmark copper futures on the London Metal Exchange surged to a record in May as bullish investors placed bets on shortages, but prices have since pulled back by roughly 19%.

Collective bargaining in Chile is often marked by brinkmanship and last-minute agreements, though Escondida has also been the scene of lengthy strikes in the past.

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SANTIAGO (Reuters) -Workers at BHP's Escondida, the world's largest copper mine, rejected an offer for a new collective bargaining agreement, setting the stage for a potential strike, the union said on Thursday.

A total of 2,371 workers, or about 99.75% of union members, voted in favor of the strike. In a statement, the union said the call for a strike was "overwhelmingly backed by partners" that saw the offer made "no legitimate progress towards worker goals."

The union reiterated its demand for 1% of dividends to distribute equally among workers and said the current offer by the company also extended work days and cut benefits.

The statement said the current offer uses "one-time bonuses that try to hide the definitive loss of conditions."

Chilean legislation lets either party call for five days of government mediation, extendable by another five days if both parties agree, to avert a strike.

In a statement, BHP said it would request government mediation in "the coming days" and hopes to reach "an agreement compatible with worker aspirations and Escondida's future sustainability."

BHP owns more than half of Escondida, along with Rio Tinto and JECO Corp.

(Reporting by Fabian Cambero and Daina Beth Solomon; Editing by Alexander Villegas, Brendan O'Boyle and David Gregorio)

(Bloomberg) — BHP Group Ltd. — fresh from being rebuffed by Anglo American Plc — swooped to buy Filo Corp., teaming up with Lundin Mining Corp. in a $3 billion deal to gain South American copper assets.

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Growth in copper has been a focus for much of Chief Executive Officer Mike Henry’s tenure. The world’s No. 1 miner has spent the past few years running the rule over its main rivals, making its biggest acquisition in a decade and — in recent months — taking a $49 billion punt at Anglo.

The strategy reflects a recognition that the company is too dependent on commodities such as iron ore and coal and doesn’t have enough copper, an essential metal for the energy transition. It also mirrors a wider reality across the global industry, as the top producers rush to expand in copper at a time when large new mines are hard to find and increasingly costly to build.

The deal announced Tuesday will give BHP a 50% stake in Filo — which owns a big copper project that straddles the Argentina-Chile border — as well as half of Lundin’s neighboring Josemaria operation, with the intention to combine both ventures to cut costs.

The hefty price tag for undeveloped mines that won’t be in production for years and will require billions of dollars to develop shows how seriously the largest miners view copper expansion and how few projects of this size there are to buy.

Combining two neighboring sites to make a bigger and more efficient mine is also in vogue across the industry, with Glencore Plc’s CEO championing the need to consolidate assets in places such as Canada and Chile.

The industrial metal is increasingly coveted for its use in wind and solar energy equipment and wiring for electricity grids and data centers.

BHP’s cash payment for the proposed transactions is expected to be about $2.1 billion. The total price for Filo is around C$4.1 billion ($3 billion), or about C$33 per share. That compares with Canada-listed Filo’s closing share price of C$27.98 on July 12, before a Bloomberg report that it was a takeover target.

Lundin Mining worked with Rothschild & Co and Morgan Stanley on the deal, while Filo was advised by BMO Capital Markets. BHP worked with TD Securities on the transaction.

BHP’s shares fell 1.3% in Sydney.

Copper prices surged to a record in May, but have dropped by almost a fifth since then, largely due to concerns over a deteriorating Chinese demand outlook. Consumption is expected to increase in the longer term, with BHP’s Henry previously saying it would double over the next two decades.

“This transaction aligns with BHP’s strategy to acquire attractive early-stage copper projects and enter into strategic partnerships with parties where complementary skills and experience can deliver long-term economic and social value,” he said in a statement.

While Anglo’s copper portfolio is already in production, BHP will have to start from scratch with Filo del Sol and Josemaria, in a region where there’s little infrastructure.

Josemaria is the more advanced of the two projects, with potential first production later this decade, according to CRU Group analyst Craig Lang. Given the challenges associated with securing producing copper assets, there are likely to be more similar acquisitions in the future, he said.

–With assistance from Mark Burton.

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BHP Group Limited

TORONTO, July 29, 2024 (GLOBE NEWSWIRE) — BHP and Lundin Mining Corporation (Lundin Mining) have agreed to jointly acquire 100% of Filo Corp., a Toronto Stock Exchange (TSX) listed company, through a Canadian plan of arrangement (Filo Acquisition). Filo Corp. owns 100% of the Filo del Sol (FDS) copper project.

BHP and Lundin Mining have also agreed to form a 50/50 joint venture to hold the FDS and Josemaria projects (Joint Venture) located in the Vicuña district of Argentina and Chile (together with the Filo Acquisition, the Proposed Transaction). Lundin Mining owns 100% of the Josemaria project. The Joint Venture will create a long-term partnership between BHP and Lundin Mining to jointly develop an emerging copper district with world-class potential.

BHP’s total cash payment for the Proposed Transaction is expected to be approximately US$2.1 billion.

Mike Henry, Chief Executive Officer of BHP said:

“The proposed transaction builds on a multi-year relationship between BHP and the Lundin Group of companies through which we have developed a strong understanding of the resource potential of the Vicuña district and the possible pathways for development of the Filo del Sol and Josemaria projects.

This transaction aligns with BHP’s strategy to acquire attractive early-stage copper projects and enter into strategic partnerships with parties where complementary skills and experience can deliver long-term economic and social value.

The joint venture with Lundin Mining will advance the development of the Vicuña district, which offers the potential to become a major contributor to the economy of Argentina for decades to come. At the same time, by partnering with Lundin Mining, BHP is continuing to invest in the growth of a robust mining sector in Canada.”

Summary of the Proposed Transaction

Filo Corp. Acquisition

BHP and Lundin Mining have agreed to jointly acquire Filo Corp. for total consideration of approximately C$4.1 billion, or C$33.00 per Filo Corp. share. This represents a premium of 32.2% to Filo Corp.’s 30-day volume weighted average price on the TSX for the period ending 11 July 2024, being the day before press speculation of a transaction, and a premium of 12.2% to Filo Corp.’s last closing price on the TSX on 29 July 2024.

Filo Corp. shareholders may choose to receive cash, Lundin Mining shares or a combination of cash and Lundin Mining shares. BHP’s share of the consideration for the Filo Acquisition will be approximately C$1,908 million (US$1,377 million) in cash. Lundin Mining’s share of the consideration for the Filo Acquisition will be approximately C$859 million in cash and C$1,289 million in Lundin Mining shares.

The Filo Acquisition will be implemented by a court-approved plan of arrangement under the Canada Business Corporations Act and will require approval by Filo Corp. shareholders in accordance with applicable Canadian corporate and securities laws.

The Board of Directors of Filo Corp. unanimously recommends (excluding certain directors who are required to abstain from voting) that the shareholders of Filo vote in favour of the Filo Acquisition.

Each of the directors and senior officers and certain other shareholders of Filo Corp., representing in aggregate approximately 35% of the issued and outstanding shares of Filo Corp., have entered into voting support agreements and have agreed to vote in favour of the Filo Acquisition unless the Arrangement Agreement is terminated.

In connection with the Filo Acquisition, BHP and Lundin Mining have also agreed to subscribe for 3,484,848 common shares of Filo Corp. at a price of C$33.00 per share for aggregate gross proceeds of C$115 million (the Filo Share Placement) to provide interim financing to Filo Corp.

On closing of the Filo Acquisition, Lundin Mining and BHP will each own 50% of Filo Corp. and the FDS project.

Joint Venture

BHP and Lundin Mining have agreed to form the Joint Venture immediately following closing of the Filo Acquisition. Each of BHP and Lundin Mining would hold a 50% interest in the Joint Venture. Under the Joint Venture, the projects will be progressed in accordance with international industry standards to deliver economic and social value.

BHP would acquire 50% of the Josemaria project from Lundin Mining for cash consideration of approximately US$690 million, subject to certain purchase price adjustments (Josemaria Transaction).

BHP and Lundin Mining would each contribute their respective 50% interests in Filo Corp. and the Josemaria project into the Joint Venture.

Strategic rationale

Consolidating the FDS and Josemaria projects:

Facilitates development optionality at a district scale: The proximity of the FDS and Josemaria projects allows for infrastructure to be shared between the projects, with greater economies of scale and increased optionality for staged expansions, as well as the incorporation of future exploration as the district matures.
Accelerates development: Leverages the advanced stage of engineering and permitting at the Josemaria project to progress the combined FDS and Josemaria projects on a phased development timeline that recognises improving investment conditions in Argentina and the copper demands of the global energy transition.

The benefits of the Proposed Transaction to BHP include:

Aligned with BHP’s copper growth strategy: The transactions align with BHP’s strategy to acquire early-stage copper projects as one of the levers to increase its exposure to future facing commodities.
Access to an emerging copper district with significant potential: The large-scale, high-grade sulphide deposit at the FDS project is considered to represent one of the most significant copper discoveries globally in recent decades.
Entry to a highly prospective jurisdiction with an experienced partner: Establishment of BHP’s presence in Argentina would be supported by the Lundin Group which has over 30 years of experience operating in the country.

The benefits of the Proposed Transaction to Filo Corp. shareholders include:

Immediately crystallises value at a compelling premium: The Filo Acquisition provides Filo Corp. shareholders the opportunity to realise immediate value from the discovery of FDS at a compelling premium.
Continued exposure to the district: The Proposed Transaction provides a path to develop FDS to its full potential, backed by two experienced copper miners. Filo Corp. shareholders would have the ability to retain exposure to the district through shares in Lundin Mining.

Details on Filo Corp. and Lundin Mining

Filo Corp. owns 100% of FDS, which is an advanced-stage copper exploration project located along the border of the San Juan Province in Argentina and the Atacama Region of Chile. BHP acquired an initial 5% equity interest in Filo Corp. in March 2022, following the discovery of the high-grade Aurora Zone at FDS. BHP and Filo Corp. subsequently formed a joint advisory committee to share expertise, exploration concepts and discuss future project development. Since then, Filo Corp. has continued to expand FDS, extending the strike length of mineralisation to over 5 kilometres, with multiple reported drill intercepts over 1,000 metres grading more than 1.0% copper equivalent.

Lundin Mining is a diversified Canadian base metals mining company with operations and projects in Argentina, Brazil, Chile, Portugal, Sweden and the United States of America, primarily producing copper, zinc, gold and nickel. Lundin Mining owns 100% of the Josemaria project, which is an advanced-stage copper project, located approximately 10 kilometres from FDS in San Juan Province, Argentina. A feasibility study for the Josemaria project was completed in November 2020 and an Environmental Social Impact Assessment was approved by the Mining Authority of San Juan, Argentina in April 2022. The Josemaria project features favourable topography for the placement of infrastructure for the district, with expansion potential.

Further details of the Proposed Transaction

The Filo Acquisition and the Josemaria Transaction are inter-conditional, whereby completion of each transaction is dependent on completion of each of the other transactions. Lundin Mining shareholder approval is not required for the Proposed Transaction.

Filo Acquisition

BHP Investments Canada Inc., a wholly owned subsidiary of BHP Group Limited, and Lundin Mining have entered into a definitive agreement with Filo Corp. (the Arrangement Agreement) to jointly acquire 100% of Filo Corp.’s issued and outstanding common shares not already owned by BHP and Lundin Mining. The Arrangement Agreement also includes customary deal protections, including non-solicitation provisions that apply to Filo Corp. (subject to customary "fiduciary out" provisions), a right for BHP and Lundin Mining to match an unsolicited superior competing proposal to acquire Filo Corp., a termination payment of C$135 million payable by Filo Corp. (half payable to Lundin Mining and half payable to BHP) and a reverse termination payment of C$135 million payable (half by Lundin Mining and half by BHP) to Filo Corp.

In addition to Filo Corp. shareholder approval, completion of the Filo Acquisition is subject to customary Canadian court approvals, the receipt of applicable regulatory, securities authorities and stock exchange approvals, and other customary closing conditions.

Filo Corp. will prepare an information circular for its shareholders with further information regarding the Filo Acquisition.

Filo Share Placement

The Filo Share Placement will be funded equally by BHP (C$57.5 million) and Lundin Mining (C$57.5 million). On closing of the Filo Share Placement, BHP and Lundin Mining will own 7.1% and 1.7%, respectively, of Filo Corp.’s issued and outstanding shares.

The Filo Share Placement is not conditional on completion of the Filo Acquisition and is expected to complete on or before 12 August 2024.

Filo Corp. intends to use the proceeds from the Filo Share Placement to fund ongoing exploration and general working capital expenses.

Joint Venture

BHP and Lundin Mining have executed a term sheet which will form the basis for negotiation of the definitive Joint Venture agreement. BHP and Lundin Mining expect to enter into the Joint Venture by completion of the Proposed Transaction.

Indicative timetable

Closing is expected to occur in the first quarter of 2025 subject to satisfaction of the conditions to closing.

Advisors and Counsel

TD Securities Inc. is acting as financial advisor to BHP with Stikeman Elliot LLP acting as legal counsel.

Authorised for release by Stefanie Wilkinson, Group General Counsel and Group Company Secretary

Contacts
Media media.relations@bhp.com	Investor Relations investor.relations@bhp.com
Australia and Asia Gabrielle Notley+61 411 071 715	Australia and AsiaJohn-Paul Santamaria +61 499 006 018
Europe, Middle East and AfricaNeil Burrows+44 7786 661 683North AmericaMegan Hjulfors+1 403-605-2314	Europe, Middle East and AfricaJames Bell+44 7961 636 432
Americas Renata Fernandez+56 9 8229 5357	Americas Monica Nettleton+1 (416) 518-6293
BHP Group LimitedABN 49 004 028 077LEI WZE1WSENV6JSZFK0JC28Registered in AustraliaLevel 18, 171 Collins StreetMelbourneVictoria 3000 AustraliaTel: +61 1300 55 4757 Fax: +61 3 9609 3015BHP Group is headquartered in Australiabhp.com

MELBOURNE (Reuters) -Global miner BHP Group and Canada-listed Lundin Mining will jointly take over developer Filo Corp for C$4.5 billion ($3.25 billion), the companies said on Monday, as they move to progress the South American projects.

BHP and Lundin will form a 50/50 joint venture to hold both the Filo del Sol and Josemaria projects around the Argentine-Chile border.

BHP and Lundin have offered C$33 per Filo share, reflecting a 12.2% premium to the Canadian copper miner's last close on Monday. Under the deal, BHP is expected to pay a total of $2.1 billion in cash.

Reuters reported on July 12 that Lundin and BHP were weighing a joint bid.

"BHP has been looking to bulk up their copper outlook. "We are still bullish on the outlook for copper, even though it has come off a long way, the medium term fundamentals remain positive," said analyst Baden Moore of CLSA.

The deal is demonstrating to BHP's shareholders that BHP has other strategies to build their copper exposure, although I don't think it means they have definitively walked away from Anglo," he added.

The deal comes as BHP in May walked away from a blockbuster $49 billion bid to take over Anglo American which rejected three proposed offers from its bigger rival over the course of six weeks, as it strove to beef up its copper holdings.

It comes as miners race to build out their pipelines of copper, a metal whose use is expected to underpin the energy transition. Shares fell 1% in a downbeat market.

The world's biggest miners are increasingly preferring to buy instead of building assets to grow, given rising costs for developing new mines and a blow-out in time lines for regulatory approvals.

($1 = 1.3854 Canadian dollars)

(Reporting by Melanie Burton in Melbourne and Rishav Chatterjee and Gursimran Kaur in Bengaluru; Editing by Alan Barona and Stephen Coates)

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