Diggers and Dealers Day 3: FMG’s Gaines talks steel demand; all the winners from the week in Kalgoorlie
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Fortescue Metals Group (ASX:FMG) CEO Elizabeth Gaines predicts steel production in China will not drop below 2020 levels despite talk of production cuts in the steelmaking powerhouse.
She told delegates at the Diggers and Dealers Mining Forum yesterday demand for iron ore was still strong following a hit to sentiment that saw prices slide by US$40/t to US$184/t in the past two weeks.
That has come about amid talk of steel production cuts which some market watchers have viewed as an attempt from the Chinese Government to knock down prices it is paying Australian producers in the midst of a major trade standoff between the countries.
“Steel prices and margins in China remained volatile during the June Quarter and throughout July and that’s been largely impacted by policy uncertainty regarding production curtailments,” Gaines said.
“At this stage it remains unclear whether these restrictions may be implemented and whether they are on production steel capacity or sinter output.
“We expect the growth rate will slow in the second half, but overall we still anticipate China’s crude steel production will be up year on year.
“Despite some signs of seasonal moderation the demand for iron ore remains strong and iron ore inventory at China’s ports has been steady at around 128Mt.
“Iron ore supply from the traditional producers remains constrained, particularly in the high grade segment, with high cost supply balancing the market.”
Gaines was the headline speaker on the final day of the Diggers and Dealers Mining Forum in Kalgoorlie, the same day WA Premier Mark McGowan revealed a Covid positive man had recently been working at the company’s Cloudbreak mine in the Pilbara while potentially infectious.
She assured delegates at the start of her talk that neither her nor any FMG staff who flew into Kalgoorlie for the event had visited Cloudbreak in the past month.
On the back of revelations about sexual assaults at FIFO camps in the Pilbara, including an alleged incident at FMG’s Christmas Creek mine, Gaines said the mining industry needs to do more to improve gender equity.
The incident and others have prompted a State Government inquiry and a major internal review of Fortescue’s workplace relations.
“As an industry we must and we can do more to ensure we have a diverse workforce that is reflective of our community and that we foster a workplace culture that truly embrace diversity and inclusiveness,” she said.
“It is critical we use forums such as Diggers to demonstrate this commitment.
“I do know my address has become somewhat synonymous with the annual Diggers Diversity Index, and this year I was very pleased to note a small increase in the number of females on the speakers list … from 3 to 4.
“I think it’s clear the industry still has some work to do in this regard.”
Gaines also spoke about the Fortescue’s green hydrogen ambitions and the business factors underpinning the shift in focus.
“It’s clear that with increasing momentum in sustainable investing, including record inflows into ESG funds, companies with leading ESG credentials will have access to larger pools of capital, leaving those who aren’t stepping up on ESG at a significant disadvantage,” she said.
With a host of commodities from iron ore to nickel to copper to lithium either soaring or touching all time highs in the past 12 months there were plenty of candidates for the major Digger and Dealer of the Year awards at last night’s Diggers gala dinner.
In the end it was IGO (ASX:IGO) which took out the Dealer of the Year award for its $1.1 billion purchase of a 49% share in Tianqi’s Australian lithium operations, its stake in the Greenbushes mine and the Kwinana Lithium Refinery.
That was purchased with a $903 million sale of IGO’s 30% stake in the Tropicana gold mine to Regis Resources (ASX:RRL), a move that saw the company flip entirely from a diversified miner to a battery metals focused miner, refiner and producer in nickel, copper, cobalt and lithium.
West African Resources (ASX:WAF), which successfully opened the 250,000ozpa Sanbrado mine in Burkina Faso at the start of the coronavirus pandemic in March 2020, was awarded the Digger of the Year prize.
Sanbrado produced 63,610oz in the June quarter at AISC of only US$928 per ounce.
Chalice Mining (ASX:CHN) was awarded the Best Emerging Company award after making the Gonneville nickel-copper-PGE discovery, the palladium rich find which has turned the Julimar region north of Perth into one of the hottest exploration postcodes in the world.
The GJ Stokes Memorial Award, named after Diggers founder Geoffrey Stokes and awarded for lifetime achievement to the mining industry, was given to Steve Coughlan.
Coughlan co-founded underground mining contractor Byrnecut in Kalgoorlie in 1987, growing to become one of the largest private mining businesses in Australia with turnover of $1.5 billion a year and more than 3500 staff across 30 countries.
Australian Financial Review scribe Peter Ker was presented with the Diggers Media Award.
All up around 2520 delegates attended the event, the second most of all time according to official figures, despite the lockdowns in Sydney and Melbourne keeping east coast suits away from the conference.
Scroll or swipe to reveal table. Click headings to sort.
|CODE||COMPANY||PRICE||1 MONTH RETURN %||6 MONTH RETURN %||1 WEEK RETURN %||1 YEAR RETURN %||MARKET CAP|
|G1A||Galena Mining||0.28||24||-5||19||19||$ 130,928,972.08|
|CMM||Capricorn Metals||2.18||15||30||19||8||$ 795,539,735.28|
|BDC||Bardoc Gold Ltd||0.073||9||-14||18||-12||$ 121,468,016.32|
|CTM||Centaurus Metals Ltd||1||28||18||16||117||$ 342,010,406.74|
|PLS||Pilbara Min Ltd||2.045||41||103||16||527||$ 5,710,994,855.20|
|BGL||Bellevue Gold Ltd||1.0875||16||7||15||2||$ 940,372,197.53|
|DEG||De Grey Mining||1.3025||9||33||14||70||$ 1,686,604,264.61|
|LTR||Liontown Resources||0.945||6||139||13||688||$ 1,803,969,478.00|
|HAS||Hastings Tech Met||0.215||19||-2||13||65||$ 373,767,882.19|
|KLA||Kirkland Lake Gold||58.69||14||14||10||-23||$ 57,520,000.00|
|RMS||Ramelius Resources||1.79||4||17||10||-17||$ 1,400,109,697.52|
|PEX||Peel Mining Limited||0.28||8||24||10||26||$ 110,795,905.61|
|OBM||Ora Banda Mining Ltd||0.1425||-16||-54||10||-61||$ 136,240,477.66|
|WAF||West African Res Ltd||1.145||13||21||10||5||$ 989,251,565.12|
|VXR||Venturex Resources||0.84||7||845||8||1332||$ 544,539,684.80|
|GOR||Gold Road Res Ltd||1.365||4||12||8||-28||$ 1,171,571,248.54|
|LYC||Lynas Rare Earths||7.58||34||51||8||230||$ 6,920,283,486.72|
|AZS||Azure Minerals||0.25||-4||-50||6||56||$ 78,855,108.86|
|CAI||Calidus Resources||0.5||0||11||6||-12||$ 201,963,815.24|
|CHN||Chalice Mining Ltd||7.22||2||78||6||584||$ 2,698,829,577.00|
|PAN||Panoramic Resources||0.175||13||9||6||161||$ 369,164,520.72|
|AIS||Aeris Resources Ltd||0.2225||17||165||6||406||$ 535,167,532.08|
|WGX||Westgold Resources.||1.86||-6||-22||5||-22||$ 791,004,266.51|
|RRL||Regis Resources||2.59||1||-26||5||-54||$ 1,960,941,325.20|
|NST||Northern Star||10.31||3||-18||5||-35||$ 11,927,786,819.75|
|IGO||IGO Limited||9.54||20||47||5||107||$ 7,201,616,901.63|
|SFR||Sandfire Resources||7.135||5||46||5||49||$ 1,258,454,410.98|
|WSA||Western Areas Ltd||2.615||8||5||5||8||$ 826,622,908.35|
|AOP||Apollo Consolidated||0.355||22||4||4||0||$ 104,983,412.40|
|LEG||Legend Mining||0.092||-12||-20||3||-32||$ 236,941,672.01|
|NCM||Newcrest Mining||26.66||5||5||3||-25||$ 21,641,831,044.16|
|TIE||Tietto Minerals||0.37||12||-6||3||-41||$ 159,664,909.60|
|RED||Red 5 Limited||0.19||0||-11||3||-25||$ 457,533,033.17|
|AGG||AngloGold Ashanti||5.4||7||-13||2||-45||$ 475,477,387.45|
|PDN||Paladin Energy Ltd||0.515||2||62||2||321||$ 1,365,655,762.47|
|BHP||BHP Group Limited||54.1||11||23||1||45||$ 156,012,289,826.24|
|PNR||Pantoro Limited||0.2075||-3||-10||1||-17||$ 302,934,720.07|
|SBM||St Barbara Limited||1.795||-3||-22||1||-48||$ 1,281,523,058.09|
|EVN||Evolution Mining Ltd||4.18||-8||-12||0||-31||$ 7,485,885,970.57|
|BOE||Boss Energy Ltd||0.165||-3||65||0||154||$ 387,306,972.02|
|S32||South32 Limited||2.995||2||11||-1||47||$ 14,023,614,039.00|
|RXL||Rox Resources||0.415||-14||-27||-1||-51||$ 66,195,197.88|
|MGV||Musgrave Minerals||0.31||-17||-16||-2||-54||$ 167,965,228.94|
|APC||Aust Potash Ltd||0.1225||-16||-28||-2||61||$ 79,701,454.75|
|SVY||Stavely Minerals Ltd||0.435||0||-40||-2||-27||$ 113,518,231.62|
|FMG||Fortescue Metals Grp||24.305||3||7||-6||36||$ 73,895,158,032.00|
|AUT||Auteco Minerals||0.105||24||-5||-9||-42||$ 191,725,577.64|
|AMI||Aurelia Metals Ltd||0.3525||-18||-14||-13||-35||$ 450,680,054.38|
|MGX||Mount Gibson Iron||0.83||-11||-2||-15||17||$ 980,083,729.35|
It costs companies thousands of dollaroos to take the stage at Diggers, so who got bang for their buck?
Only nine of the 49 ASX-listed companies who took the stage closed the week through to Wednesday down.
$131 million capped Galena Mining (ASX:G1A) was well received, with a ~5% share price rise yesterday as managing director Tony James presented to the Kalgoorlie crowd.
Galena will open the 95,000tpa lead and 805,000ozpa silver mine Abra in WA in the first quarter of 2023.
Capricorn Metals (ASX:CMM) was still basking in the afterglow of its purchase of the 2.1Moz Mt Gibson gold mine as it ramps up its Karlawinda gold mine in the Pilbara.
At the upper end of the industry lithium miner Pilbara Minerals (ASX:PLS) drew plenty of interest from investors who bought into MD Ken Brinsden’s claim a “genuine shortage” has emerged in the lithium supply chain.
Bardoc Gold (ASX:BDC) meanwhile was up as it revealed plans to bring forward ounces at its 135,760ozpa Bardoc gold project and front load the first five years of production.
The mine, which comprises a number of deposits around 40-80km north of Kalgoorlie, is expected to produce first gold in late 2022.