Monsters of Rock: Nickel investors go wild as price hits seven year high
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Nickel miners were on a roll today, bolstered by news the price of the battery metal and stainless steel ingredient had struck a seven year high of US$21,400/t overnight.
Mincor Resources (ASX:MCR), which controls the bulk of the legendary Kambalda Dome nickel mines and plans to resume production this year, was up 5.32% to $1.88, giving it a market cap of ~$910 million.
~$3.9 billion capped Indonesian miner Nickel Mines (ASX:NIC) was up 6.87% to $1.56, an all time record.
Nickel was one of a number of sectors catching a bid as rising commodity prices underpinned a positive day across the resources industry. Materials, largely comprising the major mining houses, were up 1.09% ahead of the ASX 200’s 0.66% gain.
Pilbara Minerals (ASX:PLS) hit a new closing record as well at $3.60, while Liontown Resources (ASX:LTR) was up over 6% on the day’s big news, a major offtake deal for its future Kathleen Valley mine with Korean battery maker and electronics giant LG Energy Solutions.
AngloGold Ashanti (ASX:AGG) led the large caps after gold prices rose to US$1820/oz, well over $2500/oz Australian, breaking their recent cap of ~US$1800/oz.
Iron ore rose over US$129/t overnight as traders digested news of production cuts in Brazil where the key southern mining state of Minas Gerais has been suffering from mass flooding, including from Vale.
Speculative trading activity suggests prices will continue to rise off the back of the threat of supply disruptions. Singapore Futures rose above US$130/t for the first time since early October and the most traded Dalian iron ore contract was up more than 3%.
Shares in small-scale iron ore miner GWR Group (ASX:GWR) posted a comeback, rising 13.5% after the company announced it had restarted mining operations early this month.
The company was one of a number of juniors which put the brakes on production in September after iron ore prices dipped and sea freight price obliterated margins.
It has done a rapid turnaround, approving the resumption Stage 2 cutback that was started before operations wound back last year, which will expose 2Mt of “high grade ore”.
The company has cut a series of fixed price sales contracts that will see it send 145,000t of product out to market at prices of US$100/t-$110/t for lump and US$95/t for fines without bearing shipping costs.
The first shipment will form part of a cargo with product from CuFe LTD’s (ASX:CUF) nearby JWD iron ore mine, which is also ramping up operations to take advantage of the improvement in the seaborne iron ore market.
“The GWR team has taken a proactive approach in order to extract value from its flagship C4 Iron Ore mine and has continued to export iron ore from existing stockpiles whilst mining was suspended,” GWR Group chairman Gary Lyons said.
“We have worked through many challenges over the past few months and I am proud of what we have achieved in difficult circumstances. The Company has recommenced mining operations in January and will keep shareholders informed of progress.”
Most iron ore miners were winners, aside from Fortescue Metals Group (ASX:FMG), which copped a hit from Citi analysts who downgraded the stock to a sell and raised questions about the market’s valuation of its green energy business.