Ground Breakers: Thermal coal rose HOW MUCH overnight?

Welcome to Ground Breakers, our column where we catch the morning moves for major miners in the ASX 200 and beyond.

China’s property market continued to tread on thin ice yesterday as a second homebuilder, Fantasia Group Holdings, failing to make a US$206 million debt payment on its dollar bond.

It follows fears of contagion from the debt spiral encircling Chinese property giant Evergrande, which suspended its shares from trade in Hong Kong amid rumours its property management arm will be sold off for billions so it can service some of its debts.

Impacts on commodity markets are still dulled with China locked in festivities still for its National Day holiday, which ends tomorrow.

Expect another massive day for coal miners, by the way, with prices for thermal coal out of Newcastle recording a whopping 12.3% increase to US$269.50/t, according to CBA.

Prices have risen more than 50% in a month, as winter approaches in the northern hemisphere and power shortages in Asia continue to escalate.

Yancoal (ASX:YAL), Whitehaven Coal (ASX:WHC) and New Hope Corporation (ASX:NHC) are all among the top mid-cap stocks with gains in the range of 4.5-6%.

China is facing a coal deficit of up to 80Mt by the end of 2021, putting pressure on supplies there and across the region.

There was little action in iron ore, with prices pegged still at the ~US$117/t mark they have settled at since the start of the month, recovering from late September’s dramatic slide below US$100/t.

FMG (ASX:FMG), BHP (ASX:BHP) and Rio Tinto (ASX:RIO) were all relatively steady this morning, reflecting the pause for their major export.

The big news (off-market) for those companies was the call from the WA Government that resources sector employees would need to get a double dose of a Covid vaccine by the end of the year, which could have an impact on labour pressures if the policy receives push back from workers.

Gold stocks have pulled back from yesterday’s strong performances in early trade, but De Grey Mining (ASX:DEG) is still running off the tailwinds of its scoping study release yesterday, which confirmed its Hemi discovery would be one of the world’s largest new gold mines.

Ground Breakers share prices today:

Pilbara Minerals (ASX:PLS) boosts Pilgangoora reserves

Pilbara has retreated from the record share price of $2.45 it hit after announcing a big jump in spodumene prices for its Battery Material Exchange auction in September.

But it is back in the winner’s circle this morning, after announcing a big uplift in reserves at the Pilgangoora mine in the Pilbara, one of the world’s largest spodumene producing operations.

Pilbara was able to ride out the dive in lithium prices that sent receipts for the battery metal tumbling below US$400/t last year, and is enjoying the rebound after incorporating the Ngungaju operations of its collapsed neighbour Altura into its WA mining hub.

One thing PLS has in abundance is scale, and the discovery of new pegmatite material along with the incorporation of Ngungaju has led to a 54% increase in proven and probable reserves, as well as a 47% increase in contained lithium oxide to 162Mt at 1.2% Li2O, 100ppm tanatalum pentoxide and 1% iron oxide.

At a run rate of 6.3Mtpa, that will give Pilbara another 26 years extracting the booming element from Pilgangoora, dovetailing with expected supply deficits as EV uptake surges.

“The continued growth in Ore Reserves reflected the successful integration of the Ngungaju project area and the highly successful development drilling program undertaken this year,” PLS MD Ken Brinsden said.

“The quality and scale of the Pilgangoora project confirms Pilbara Minerals as a leading hard rock lithium producer and truly sets the scene for our expansion to 6.3 Mtpa and continued growth beyond that.”