Ground Breakers: A good morning for gold stocks as price tops US$1850/oz

Gold miners woke up bright eyed and bushy tailed on Monday as a ~3% charge in gold prices to around US$1860/oz led to passionate buying from investors.

It came off the back of news US inflation had risen to levels not seen in 40 years, topping the 7.5% mark.

That sent investors to traditional safe haven assets. As usual, what is bad for the world tends to be good for gold.

‘Thank you very much’ you would say if you were digging the yellow metal around Australia and elsewhere.

The All Ords gold index is up 6.32% this morning, led by a series of big names.

The big three of Northern Star Resources (ASX:NST), Evolution Mining (ASX:EVN) and Newcrest Mining (ASX:NCM) added a combined $2.6 billion to their market caps.

Mid-tiers were in the green as well. St Barbara (ASX:SBM) rose 7.75% while Regis Resources (ASX:RRL), hammered after a production downgrade last month, recovered 9.24% of its value in the rally.

Gold Road Resources (ASX:GOR) and Ramelius Resources (ASX:RMS) were also strong gainers, while Resolute Mining (ASX:RSG), a major laggard last year, was up 10.35% to 32c.

It was a different story for iron ore, with all the big names down as the Dalian futures contract for May fell 6.1%.

The Dalian price tanked on Friday after China’s National Development and Reform Commission doubled down on comments from a couple weeks ago about clamping down on speculation as iron ore prices rose 70% from last year’s lows to US$150/t at the start of 2022.

One of the many levers China can pull, the Dalian exchange has doubled transaction costs on some iron ore futures contracts to reduce demand.

Gold miners share prices today:

Rio signs deal with traditional owners

Rio Tinto (ASX:RIO) has initiated its first heritage plan with traditional owners since the Juukan Gorge scandal in 2020.

We’re sure you don’t need reminding, but if you do that was the one where the company obliterated priceless rock caves containing evidence of 46,000 years of Aboriginal culture.

It released a statement this morning in partnership with the Yinhawangka Aboriginal Corporation agreeing a new “co-designed management plan” to ensure the protection of heritage sites at Rio’s proposed Western Range mine near Paraburdoo in the Pilbara.

Western Range is a higher grade orebody which is part of the Greater Paraburdoo Iron Ore Hub proposal.

Its ore reserves were reduced last year from 201Mt to 159Mt, in part because of decisions to exclude heritage sites from its mining envelope after the Juukan Gorge incident.

The plan looms as an opportunity and potential template for Rio to recover its standing and improve relations with traditional owners after the incident which sparked an outcry from institutional investors that resulted in a series of high profile departures, including former CEO JS Jacques.

Rio says it is the first time Rio and the Yinhawangka People have jointly developed a plan of this type, which will provide protocols for joint decision making on environmental matters, mine planning and closure as well as support for the Yinhawangka Ranger programme.

“We are grateful to Rio Tinto for working collaboratively with YAC and the Yinhawangka people throughout this comprehensive engagement process; providing YAC with the necessary support to enable our team to focus on ensuring the Yinhawangka people have their voice embedded in the SCHMP,” YAC CEO Kupa Teao said.

“Together, we have ensured the expectations of the Yinhawangka people are clearly incorporated in to the obligations moving forward.”

Rio Tinto’s iron ore chief Simon Trott, who moved into the role post-Juukan Gorge after the departure of previous asset head Chris Salisbury, said the agreement was an important milestone.

“We are appreciative of the Yinhawangka people for the opportunity to work together on this important plan which provides a new framework for working in partnership on-Country,” he said.

“We know we haven’t always got this right in the past. We have learned and continue to learn a lot from this co-designed process which is the manner in which we want to work with all Traditional Owners.

“This is an important milestone for the Western Range project, allowing the Yinhawangka people and Rio Tinto to move forward together.”

The heritage plan was submitted to the WA EPA on February 1 as part of Rio’s environmental approval process for the Greater Paraburdoo proposal.