• Gold rallies hard overnight to $US1,653/oz
  • Benchmark Mineral Intelligence says prices for lithium chemicals in China have climbed further
  • Ganfeng sells down Core Lithium shareholding
  • Manganese miner Jupiter books big profit, market outlook uncertain

Your ASX large cap mining news for Thursday, September 29.

China’s giant Ganfeng might be watering down it’s dominant spot in Core Lithium, but it’s a big 2.6% gain for Materials in early trade, with almost every large cap and mid-cap on the ASX comfortably in the green.

Gold rallied hard over night to $US1,653/oz, sending gold stocks like Newcrest (ASX:NCM) (4.4%) and Northern Star (ASX:NST) (+5.7%) sharply higher in early trade.

“Gold prices welcomed the BOE’s [Bank of England] dramatic intervention that avoided an imminent gilts crash and sent global bond yields sharply lower,” says OANDA analyst Edward Moya.

“This was somewhat expected and serves as a reminder that gold will do just fine once the global bond market selloff is truly over.

“Gold’s two-year low might be the bottom, if not it should be very close to it.”

Here’s hoping.

Also leading the gains today were coal and battery metal/critical mineral stocks like Yancoal (ASX:YAL), Whitehaven (ASX:WHC), Lynas (ASX:LYC), Allkem (ASX:AKE), and Pilbara Minerals (ASX:PLS).

The good news also continues for lithium producers, with Benchmark Mineral Intelligence reporting that prices for lithium chemicals in China climbed further in the period 21-28 September 2022.

“… average pricing for battery grade carbonate exceed[ed] the RMB 500,000/tonne ($US69,000) threshold, as robust downstream demand from the EV sector continues to drive upward price pressure,” writes the pricing agency.


Ganfeng sells down Core Lithium shareholding

One of the world’s biggest lithium companies Ganfeng has sold down a portion of its shareholding in Australia’s next producer Core Lithium (ASX:CXO), meaning that Ganfeng is no longer a substantial shareholder of the company.

The decision to divest a portion of its shareholding was driven by portfolio weighting considerations and the opportunity to monetise a portion of the investment, Ganfeng vice chairman Wang Xiaoshen says.

“We remain a supportive partner of Core by virtue of our existing shareholding and binding offtake arrangement and look forward to seeing Finniss progress towards first commercial production.”

Ganfeng first subscribed for shares in a placement at a price of 33.8c in August 2021. Since then, CXO is up 225% as it advances Finniss through the construction phase.

It remains on schedule to deliver first lithium spodumene concentrate production in the first half of 2023.

CXO share price chart


Manganese miner Jupiter books big profit

For the quarter ending August 31 Jupiter (ASX:JMS) – which has a 49.9% interest in the Tshipi Borwa manganese mine – earnt a $54.9m profit after tax, a big increase on the prior quarter.

The $372m market cap stock has a massive $115.4m in the bank, but the market outlook is a little uncertain.

Manganese is a key ingredient used to strengthen steel but is also finding favour as a component in lithium-ion batteries.

JMS says seaborne and spot manganese ore prices spiked at the beginning of the quarter as sentiment turned positive following a drop in COVID-19 lockdown measures in China.

Unfortunately, downstream demand failed to materialise, and prices started correcting downwards.

“Prices faced more pressure through the quarter as imports into the key market increased and consumption of manganese ore by alloy plants decreased as they too started curtailing production due to weakened demand from local steel mills and depressed manganese alloy prices,” JMS says.

Manganese ore prices are expected to remain under pressure until such time as downstream demand from alloy plants and, in turn, steel mills recover.

“Crude steel demand recovery, particularly in China, will in all likelihood need to be spurred by the introduction of major fiscal policy and stimulus measures by the Chinese Central Government,” it says.

“Outside of China, concerns over elevated energy costs and availability will remain an important factor influencing the industry in the short term.”

JMS share price chart