Australian (ASX) Stock Market Forum

FMG - Fortescue Ltd

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IvoryWolf said:
Respectfully disagree @Value Collector - that correlation doesn't appear to have been the case this calendar year - a closer correlation between FMG and iron ore (either TSI or TIO) appears to be the case:
Click to expand...
Add to that the forward projections and someone is wrong.
Way too many moving parts in Australia's economy at the moment, for my liking and none are increasing our competitiveness.



New government data projects a significant downturn for mining over the next four years, which could impact ASX mining shares.

The Federal Government delivered its Mid-Year Economic and Fiscal Outlook on Wednesday.Â

According to the ABC, the Government is forecast to suffer a $8.5 billion hit to its tax take over four years from a loss of mining export revenue.

Wednesday's update to the Federal budget will reveal a $100 billion downgrade in mining exports by Treasury over the four years to 2027-28.
The blow reflects the drop in demand for iron ore and other commodities as Australia's largest trading partner, China, struggles to shore up its deteriorating economy.
Click to expand...

China's shifting demand​

China has historically been Australia's largest export destination, particularly in natural resources.

According to ANZ, the relationship between China and Australia remains heavily reliant on iron ore, liquid natural gas and coal. These resources represent 80% of the country's exports to China.Â

However, economists anticipate this to shift in the near future.

Looking ahead, the green transition, plus China's protracted property sector woes and shrinking population will lead to even weaker steel consumption, weighing on iron ore demand.
Click to expand...
The Reserve Bank of Australia reinforces this view. The central bank projects that China's demand for Australian iron ore will fall by 80% by 2050.

Furthermore, according to BP, the share of coal used for power generation in China is forecast to fall from 63% in 2022 to 14% in 2050
 
IvoryWolf said:
Respectfully disagree @Value Collector - that correlation doesn't appear to have been the case this calendar year - a closer correlation between FMG and iron ore (either TSI or TIO) appears to be the case:

View attachment 189839
Click to expand...
I am not saying the lower dollar has an immediate affect on FMG’s share price, I am saying the lower dollar is better for the company’s profit margin.

Iron ore is traded in US Dollars, but most of FMG’s costs are in Australian dollars, as the Australian dollar weakens FMG receives more AUD for each USD it receives.

Of course none of this happens in a vacuum, the Iron Ore price is also moving around at the same time as the dollar.

But, if the AUD weakening against the USD does offset some of the drop in IRON ORE price.
 
Good afternoon
Found this article written by Brad Thompson for the Australian Business Network, most interesting. Published electronically at 12.08pm today (31/12/24):

Fortescue says it is still committed to its iron ore mine in Gabon​

Touted as a ‘remarkable’ project that would be the envy of its peers, sources close to Fortescue’s iron ore mine in Gabon say staff have been stood down. So other than a token first shipment, what’s happening at the $320m project?

Fortescue has moved to allay fears its iron ore project in Gabon is in trouble despite appearing to have made little progress since celebrating a first shipment from the African nation more than a year ago.
Hailed as a project that would “open growth opportunities” for Andrew Forrest-led Fortescue throughout Africa, sources close to the project suggest the mine hasa strained relationship with Gabon’s military rulers and stood down contractors and slowed exploration activity in the lead up to Christmas.

Fortescue said in response that there would be fluctuations in job numbers as it looked to advance the project in Gabon, where General Brice Oligui Nguema seized power in August 2023. General Nguema led a coup against then president Ali Bongo Ondimba, whose family had ruled for 55 years and shown a willingness to work with Fortescue.

What is Fortescue doing in Gabon?​

“Fortescue remains fully committed to the Belinga iron ore project and the long-term benefits a large-scale development will bring to Gabon,” a Fortescue spokesperson said.

“Our discussions with the Gabon government remain positive and we continue to work together to advance a potential large-scale development.

“The project is still in an early stage of development, with an immediate focus on exploration and studies. “As a result, in the short term there will be an ebb and flow in job numbers as we move through various stages, finish our initial main camp construction, and allow time for studies to be completed. “We remain focused on prioritising the employment of a local workforce and will explore ways to upskill and redeploy staff to other areas of the business where possible. “In line with Fortescue’s commitment to create a positive impact in the areas in which we operate, we will continue to engage with, and support, local communities.”

How big is the Belinga iron ore project​

Fortescue did not respond to questions about whether exploration work had come to halt, or how many employees it had on the ground in Gabon.

More than 600 Gabonese, including contractors, have been employed on the project at various times, including some 200 from local villages.

Fortescue had also purchased more than $US30m in goods and services from businesses in Gabon.

Fortescue owns as 72 per cent stake in Ivindo Iron, the entity that operates the Belinga project. The remainder of Ivindo is held by Abu Dhabi’s Africa Transformation and Industrialization Fund and the Gabon government.

How much has Fortescue invested in Gabon​

Perth-headquartered Fortescue earmarked $US200m for early-stage mining development at Belinga in 2023-24.

It has not provided guidance on capital expenditure at Belinga in 2024-25 after shifting focus to exploration and study work.

Fortescue has flagged expenditure of $US300m-$US400m across the group on various exploration projects and studies in 2024-25, with any spending on Belinga likely to come from this pool.

Julie Shuttleworth, one of Dr Forrest’s most trusted lieutenants at Fortescue for more than a decade, was running the project before she left the company in June last year.

Has the site produced any iron ore?​

In an update provided at the end of September, Fortescue said exploration work continued and to that point over 70,000 metres of reverse circulation drilling and 10,000 meters of diamond core drilling had been completed. Sources said Fortescue was finding the going tougher in Gabon under military rule after making rapid progress with Belinga under the former president.

The December 2023 shipment came just 10 months after Fortescue signed a mining convention with then Gabonese government. The immaterial volume of iron ore on board was sourced from a small operation at Belinga, a potential high-grade deposit in Gabon’s northeast that has been subject to extensive studies and was once on BHP’s radar.

Fortescue metals division chief executive Dino Otranto hailed the shipment as a remarkable achievement at the time.

“This project has the potential to revolutionise our portfolio and ultimately create a product that will be the envy of our peers. It will also open growth opportunities for Fortescue throughout Africa,” he said.

Gabon handed an operating permit covering Belinga to the China Machinery Engineering Corporation as far back as 2006, but later suspended the permit after a falling out between the parties.

Not holding
Have traded.

Happy New Year.

Kind regards
rcw1
 
rcw1 said:
Good afternoon
Found this article written by Brad Thompson for the Australian Business Network, most interesting. Published electronically at 12.08pm today (31/12/24):

Fortescue says it is still committed to its iron ore mine in Gabon​

Touted as a ‘remarkable’ project that would be the envy of its peers, sources close to Fortescue’s iron ore mine in Gabon say staff have been stood down. So other than a token first shipment, what’s happening at the $320m project?

Fortescue has moved to allay fears its iron ore project in Gabon is in trouble despite appearing to have made little progress since celebrating a first shipment from the African nation more than a year ago.
Hailed as a project that would “open growth opportunities” for Andrew Forrest-led Fortescue throughout Africa, sources close to the project suggest the mine hasa strained relationship with Gabon’s military rulers and stood down contractors and slowed exploration activity in the lead up to Christmas.

Fortescue said in response that there would be fluctuations in job numbers as it looked to advance the project in Gabon, where General Brice Oligui Nguema seized power in August 2023. General Nguema led a coup against then president Ali Bongo Ondimba, whose family had ruled for 55 years and shown a willingness to work with Fortescue.

What is Fortescue doing in Gabon?​

“Fortescue remains fully committed to the Belinga iron ore project and the long-term benefits a large-scale development will bring to Gabon,” a Fortescue spokesperson said.

“Our discussions with the Gabon government remain positive and we continue to work together to advance a potential large-scale development.

“The project is still in an early stage of development, with an immediate focus on exploration and studies. “As a result, in the short term there will be an ebb and flow in job numbers as we move through various stages, finish our initial main camp construction, and allow time for studies to be completed. “We remain focused on prioritising the employment of a local workforce and will explore ways to upskill and redeploy staff to other areas of the business where possible. “In line with Fortescue’s commitment to create a positive impact in the areas in which we operate, we will continue to engage with, and support, local communities.”

How big is the Belinga iron ore project​

Fortescue did not respond to questions about whether exploration work had come to halt, or how many employees it had on the ground in Gabon.

More than 600 Gabonese, including contractors, have been employed on the project at various times, including some 200 from local villages.

Fortescue had also purchased more than $US30m in goods and services from businesses in Gabon.

Fortescue owns as 72 per cent stake in Ivindo Iron, the entity that operates the Belinga project. The remainder of Ivindo is held by Abu Dhabi’s Africa Transformation and Industrialization Fund and the Gabon government.

How much has Fortescue invested in Gabon​

Perth-headquartered Fortescue earmarked $US200m for early-stage mining development at Belinga in 2023-24.

It has not provided guidance on capital expenditure at Belinga in 2024-25 after shifting focus to exploration and study work.

Fortescue has flagged expenditure of $US300m-$US400m across the group on various exploration projects and studies in 2024-25, with any spending on Belinga likely to come from this pool.

Julie Shuttleworth, one of Dr Forrest’s most trusted lieutenants at Fortescue for more than a decade, was running the project before she left the company in June last year.

Has the site produced any iron ore?​

In an update provided at the end of September, Fortescue said exploration work continued and to that point over 70,000 metres of reverse circulation drilling and 10,000 meters of diamond core drilling had been completed. Sources said Fortescue was finding the going tougher in Gabon under military rule after making rapid progress with Belinga under the former president.

The December 2023 shipment came just 10 months after Fortescue signed a mining convention with then Gabonese government. The immaterial volume of iron ore on board was sourced from a small operation at Belinga, a potential high-grade deposit in Gabon’s northeast that has been subject to extensive studies and was once on BHP’s radar.

Fortescue metals division chief executive Dino Otranto hailed the shipment as a remarkable achievement at the time.

“This project has the potential to revolutionise our portfolio and ultimately create a product that will be the envy of our peers. It will also open growth opportunities for Fortescue throughout Africa,” he said.

Gabon handed an operating permit covering Belinga to the China Machinery Engineering Corporation as far back as 2006, but later suspended the permit after a falling out between the parties.

Not holding
Have traded.

Happy New Year.

Kind regards
rcw1
Click to expand...
Imagine the problems RIO will have with Simandou.
 
sptrawler said:
Add to that the forward projections and someone is wrong.
Way too many moving parts in Australia's economy at the moment, for my liking and none are increasing our competitiveness.



New government data projects a significant downturn for mining over the next four years, which could impact ASX mining shares.

The Federal Government delivered its Mid-Year Economic and Fiscal Outlook on Wednesday.Â

According to the ABC, the Government is forecast to suffer a $8.5 billion hit to its tax take over four years from a loss of mining export revenue.


China's shifting demand​

China has historically been Australia's largest export destination, particularly in natural resources.

According to ANZ, the relationship between China and Australia remains heavily reliant on iron ore, liquid natural gas and coal. These resources represent 80% of the country's exports to China.Â

However, economists anticipate this to shift in the near future.


The Reserve Bank of Australia reinforces this view. The central bank projects that China's demand for Australian iron ore will fall by 80% by 2050.

Furthermore, according to BP, the share of coal used for power generation in China is forecast to fall from 63% in 2022 to 14% in 2050
Click to expand...
Crikey! 25 years is a Generation--

Did these Snake-oil salesman ever get One or Two Year forecasts correct?
How many of the 17 Dart Throwing US Fed got One Year Correct and Where is China going to get its URANIUM
 
Captain_Chaza said:
Crikey! 25 years is a Generation--

Did these Snake-oil salesman ever get One or Two Year forecasts correct?
How many of the 17 Dart Throwing US Fed got One Year Correct and Where is China going to get its URANIUM
Click to expand...
Uranium from Russia and affiliated inc west Africa out of French control,not from Australia so io remains critical for both FMG obviously and our economy.
 
If you think France and Africa will ever side with Russia and/ or China in Mine or Your Lifetimes I suggest you Think Again

NB: Why do so many Talk themselves into Anything they Want to Believe --
EG : The Chicken or the Egg

OR
Maybe it was an Immaculate Conception? LOL!

Re FMG: IMHO FMG and Twiggy have the Best Relationship of All with regard to Iron Ore
In other words IMHO I think they are in Bed together
 
Last edited:
Captain_Chaza said:
If you think France and Africa will ever side with Russia and/ or China in Mine or Your Lifetimes I suggest you Think Again

NB: Why do so many Talk themselves into Anything they Want to Believe --
EG : The Chicken or the Egg

OR
Maybe it was an Immaculate Conception? LOL!

Re FMG: IMHO FMG and Twiggy have the Best Relationship of All with regard to Iron Ore
In other words IMHO I think they are in Bed together
Click to expand...
Any port in a storm, comes to mind. :rolleyes:
 
farmerge said:
As long as that port is not on the African Continent.
Click to expand...
no i am starting to disagree after some decisions made recently in Australia ( at state and federal level ) i am starting to relax my bias against Africa ( and PNG ! )

( which is why i have nibbled a lot on ZIM this year [ 2024 ] )

but i still strongly prefer active, profitable miners ( over explorers ) which still culls many African projects
 
FMG falling sharply in the last few days - and today in particular. No new news. Iron ore price has dropped just below $100 US BUT since the Aus dollar has also dropped against the US the returns will still be ok.

Today's volume is quite high so perhaps some forced exits.

Currently $17.36 :(
 
basilio said:
FMG falling sharply in the last few days - and today in particular. No new news. Iron ore price has dropped just below $100 US BUT since the Aus dollar has also dropped against the US the returns will still be ok.

Today's volume is quite high so perhaps some forced exits.

Currently $17.36 :(
Click to expand...
I am expecting there will be quite a bit of nervousness about exactly how a trump presidency will affect Chinese steel exports.

To me it doesn’t seem overly possible that the USA can ramp up steel production in any meaningful way to have an affect of steel imports.

But like always we will just have to wait and see, markets tend to balance out, the first thing that will happen is the USA will consume a lot more scrap steel meaning less scrap will be exported, and that scrap normally competes in the market with virgin Iron Ore.

The USA will also probably consume more Iron Ore from Canada and Brazil, which again take away competing products, so I am not worried.
 
For the Yearly Comp
FMG is my no 1 pick. At this time of January.
it has slipped back a bit since the start of the month, but not to worry, as what is good for Twiggy and Nicola has to be good for the peasants who hold shares in this company. This iron ore monster just keeps rolling on.
 

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