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Sources say that Baowu, a top Chinese steelmaker, is interested in acquiring a stake in BHP's iron ore mine.
According to two sources briefed about the matter, China Baowu Steel Group is interested in acquiring a minority stake?in BHP's Jimblebar Iron Ore Mine located in Western Australia. Sources say that Baowu may seek a stake between 15% and 25 percent of BHP's project. They did not provide any other information or a possible valuation, but spoke anonymously due to commercial sensitivities. BHP declined to comment. Baowu has not responded to a comment request. There has not been a decision made, and it is not certain that Baowu will be able to complete a deal. BHP holds 85%, while Japanese trading houses Itochu & Mitsui hold minority stakes. BHP said its stake was worth $3.2 billion at the time of mine opening in 2014. BHP produced 62.5 million tons worth $6.2 billion in current prices of iron ore from the mine during fiscal 2026. This was a quarter BHP's production of the steelmaking ingredient. Australia is a top destination for Chinese investors Bankers who are familiar with BHP questioned whether a deal like this would be in line with BHP's strategy to maximize the value of its ore by selling it to Chinese buyers. This was evident from recent deals between BHP and the state-owned buyer China Mineral Resources Group. CMRG is increasingly negotiating with miners for steel mills and has repeatedly prohibited mills from purchasing certain products in order to win concessions from the miners during contract negotiations. BHP and CMRG settled a dispute that lasted more than six months in April. This allowed steel mills to repurchase certain cargoes including Jimblebar Fines which had been "blacklisted". To spread the risk, miners tend to sell stakes of new projects as opposed to established mines like Jimblebar. Baowu is no stranger to Australian miners. In fact, it has already partnered up with them in the past. Australia used to be a popular destination for Chinese investors. However, investment has been?falling for years due to national security concerns in Canberra. Canberra has prevented Chinese acquisitions of lithium and rare Earths. China no longer ranks among the top 10 foreign investors in Australia.
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Australian shares have their worst week for nearly a full month, as miners and energy drag.
Australian shares closed 'little changed' on Friday, but posted their worst week in a month as losses among miners and energy stocks were offset by gains for banks after the Fed made dovish remarks. The S&P/ASX 200 closed 0.2% lower, at 9,005,90 points. This was its worst week since 10 August. On Thursday, the benchmark index gained 0.5%. Federal Reserve Governor Christopher Waller stated that benign inflation data could strengthen the Fed's case to hold rates at its policy meeting later this month. Cameron Curko of Pitcher Partners independent accounting firm, CIO, said that the remarks were "supportive of the Australian Dollar" because they reduced the possibility of further U.S. interest rate increases and made the U.S. dollar less attractive. Currency headwinds are bad for some exporters like miners, healthcare names and others. BHP and Rio Tinto both fell by 0.7%, the steepest weekly decline in over two months. There are other, more pragmatic reasons for some majors to trade ex-dividend, e.g. BHP. "Higher energy costs could also be a factor in affecting medium-term growth expectations", added Curko. Energy stocks slipped 1.2%. Ampol and Viva Energy, which traded their shares ex-dividend, led the losses, with a decline of 6% and 3,7% respectively. Financials, which includes all four "Big Four" lenders, reported its best week in two months. Capital Economics analysts expect Australia's central banks to increase interest rates by another 25 basis points at their meeting this month. They cite the economic growth and a trimmed inflation rate that shows no signs of slowing. Tech stocks gained 1%. Discretionary stocks, Real Estate stocks, and other stocks all gained 0.5%. The benchmark S&P/NZX 50 Index for New Zealand rose by?0.9%, to 13,974.18 index points.
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Crude oil prices set to rise by the most since mid-July as US-Iran tensions fuel oil price gains
As tensions between the U.S. and Iran escalated, oil prices rose on Friday. They are now heading towards their steepest weekly gains since mid-July. Brent crude futures rose by 54 cents or 0.6% to $96.06 per barrel at 0100 GMT. U.S. West Texas Intermediate crude crude futures gained 80 cents or 0.9% to $92.10. Brent and WTI both saw weekly gains of 7.6%, while WTI gained 10.4%, the biggest since the week ending July 20. The U.S. attacks on Iran this week, which killed and injured dozens of civilians including Iranians, were the most violent clashes that have occurred between the two nations since July. The seven-month-old?war', which began in late February with U.S. and Israeli strikes, has now entered its seventh month. Israel Defence Minister Israel Katz has warned that Israel will "cripple Iran's civilian and military infrastructure, including its energy facilities. ANZ analysts increased their Brent crude forecast 'on Friday, to $95 a barrel in the short-term. There is a risk of upside if the Middle East conflict intensifies. The market is now entering a phase of delicate adaptation. The initial supply crisis was eased by the increased inventories, but now the challenge is to maintain the market's balance as these buffers are reduced," analysts stated. JD Vance, the U.S. vice president, told reporters Thursday that Washington will not hold any talks with Iran unless Tehran ceases to attack commercial shipping in Strait of Hormuz. Russian President Vladimir Putin, who capped oil's rise, said that there was still a "path" to an agreement to end the conflict in Ukraine. He added that both the U.S. and China were ready to support a peaceful settlement. Iran has also expanded the list of ships it considers non-compliant, and which are subject to fines, seizure or detention should they try to transit through the Strait. The only vessels that Tehran has allowed to pass through Hormuz are Iraqi ships. Two Iraqi energy officials announced on Wednesday that Iraq's oil exports increased to 2.34 million barrels per day (bpd) in August, up from 1.35 million bpd. September exports are also expected to rise, as Iranian approvals of Iraqi tankers and heavy discounts encourage buyers.
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Australia sends drone experts to Nepal to help in search for 36 missing citizens
On Friday, Australian disaster response experts left for Nepal to "join" the search for survivors following the Himalayan floods. The government had expressed "serious concern" about the welfare of the 36'missing' citizens. After a collapsed glacier triggered floods on the 26th of August, more than 1,200 people have been confirmed dead and?some 5,00 remain missing. According to the Nepalese government, 583 foreigners are missing. Authorities said that a 15-member Australian Disaster Assistance Response Team consisting primarily of drone pilots in state emergency services was sent to Nepal after the government requested it. "We still hold out hope that some people may still be surviving and we're hoping this team can assist in locating any of these people," Jeremy Fewtrell (the commissioner of Fire and Rescue New South Wales) told reporters on Friday at Sydney Airport. He said that the majority of the team was made up of drone pilots. They were also?equipped with drones that could?survey large areas and navigate inaccessible spaces. This response is in response of the Nepali authorities. It's a set of tools they believed would help them. Seven Australian Federal Police disaster victim identification specialists will also arrive in Nepal this Saturday. The announcement was made by the government on Thursday. Foreign Minister Penny Wong said 19 Australians, including consular officials, humanitarian police, and?defence & police?personnel, were already in Nepal. Nepal's Foreign Minister said last week that international assistance was needed in specialist and technical areas. Authorities in the area have stated that the chances of finding survivors are fading, but rescue efforts continue along 'the border with China. Australian media reported that some relatives of Australians who have gone missing also traveled to Nepal to carry out their own searches. Australian Treasurer Jim Chalmers said on Friday that 36 Australians were still?missing?, even though two had been confirmed safe over night. He told ABC News Breakfast that "we still have serious concerns about the 36 Australians we haven't yet been able locate."
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You are not looking for payroll data, but MORNING BID Europe.
Stella Qiu gives us a look at what the future holds for European and global markets. Christopher Waller, the U.S. Federal Reserve governor, urged overnight markets to "give deflation a shot" while?global bonds yields flew. The markets have now reverted to pricing this month's interest rates decision as a coin flip, deciding whether the Fed will?stay?pat or raises rates for the first three years. You can consider the job done. Then he suggested that the non-farm payrolls for August, which is due in the afternoon, was not the data you were looking for. The August CPI report due next week will reveal the truth. After a 23,000-job drop in the previous month, median forecasts predict a rise of 56,000. Participants in the market expect unemployment to remain at 4.1% with a possible risk of 4.2%. Asia's relief was enough to boost the Nikkei by 1.1%. South Korea's KOSPI jumped 1.3%, and Hong Kong's Hang Seng rose 2.1%. Wall Street and European Futures are "practically flat" as I write. A further fall in employment could be enough to tip the scales towards a 'pause' on rates this month. However, a strong result would allow the Fed to raise interest rates. The CPI and PPI results next week will be the deciding factor. Some economists have even modelled PCE inflation to within three decimal places. The yield curve has risen as investors who hold long-term bonds prefer a Fed rate hike to prevent inflation. Brent crude futures rose 7% to $95.52 per barrel this week, a six-week high. The retreat of the U.S. Dollar has added to an enigmatic rally in the yen this week, which is up 2.5% to 156 per dollar. Some believe that?Tokyo is conducting?FX checks or has even made a clandestine intervention. Meanwhile, expectations of a rate hike by the Bank of Japan have also been building. The BOJ's move is priced about 75% in this month, and a tightening by 30 basis points is expected by October. This raises the possibility of a bigger increase or rare back-toback moves. OpenAI has released Astra which it claims is the most powerful large-language model ever and can perform most of your laptop tasks. This will be a huge hit with laptop makers. The following are key developments that may influence the markets on Friday. * UK S&P Global PMIs Eurozone retail sales in July The August nonfarm payrolls report includes the following data:
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The soft dollar sets off a 10-week streak of saving copper
The U.S. Dollar's overnight drop has helped to offset the pressure of receding supply fears. By 0300 GMT, the benchmark three-month copper price on London Metal Exchange had risen 0.06% to $14,342 per metric tonne. This puts the metal on course to gain 0.03% in this week's trading, marking its tenth consecutive weekly gain. The Shanghai Futures Exchange's most traded copper contract rose by 0.58%, to?109.170 yuan (16,254.73) per ton. After comments from Fed Governor Christopher Waller, the dollar fell overnight as expectations of a rate hike dwindled. CME's Fedwatch shows traders are now pricing in an even chance of a rate hike for September, up from a two-in-three chance the day before. A cheaper U.S. dollar can ?support greenback-denominated commodities by making them ?more affordable for buyers using other currencies, and lower rates can support industrial metals by stimulating economic activity. The week was marked by volatility for copper. Market perceptions of a less tight physical supply and resurgent rate fears weighed down trading in the early part of the week. LME copper’s cash-to-3-month spread The price of backwardation dropped to $57.93 per ton, down from $171.40 per ton the week before. Aluminium prices also rose on the 'LME, nearing a new three-week record due to supply shortages and concerns about availability. LME aluminium rose?0.2% and is on track to end the week with a 2.16% increase. Cash-to-three-month Spreads shifted to a slight downwardation on Thursday. This indicates tight availability. After paring down earlier gains, the?SHFE aluminum price increased by 0.25%. It had reached 24,510 yuan per ton, which was its highest level since June 4. Zinc was the least affected metal, only increasing by 0.01%. Lead increased by 0.11%. Nickel also gained 0.17%. Tin fell 0.27%. Nickel lost 0.57%, while tin gained 0.67 percent.
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Officials estimate Nepal flood losses at $2.56 Billion
KATHMANDU, September 4 - Property, housing, and infrastructure valued at?at least?387.5 billion Nepalese Rupees ($2.56 'billion) were lost during 'Nepal's' 'catastrophic flooding' last week, according to the head of the disaster authority. Dharma Raj Upreti said that the cost of restoring power, providing drinking water, and building temporary shelters in the first four months would be approximately $52.6 million. These are estimated amounts. "We have calculated these?in coordination?with different?concerned?agencies and departments," Upreti stated, adding that a more detailed assessment will be made soon. Upreti, a senior official at the Nepali government, said that Nepal would need to rebuild 20,000 homes in flood-ravaged regions, and that 7,500 of these homes were destroyed. On August 26, a collapsed glacier in Nepal's border area with China sent a flood down the Trishuli River, wiping out towns and villages. More than 1,250 people were killed, and more than 4,200 are still missing. Thousands of people have been displaced.
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Sources: Motiva restarts a small crude distillation plant at Texas refinery
Motiva Enterprises restarted a small 'crude distillation unit (CDU) at its 656,400 barrel per day (bpd), Port Arthur, Texas refinery on Thursday. Sources?said that the 90,000 bpd unit, which is the smallest of the refinery's three crude distillation units, was one of several closed on Tuesday night as Tropical Storm Eduoard passed close to the?refinery. It is the largest in the United States. VPS-2, the refinery's smallest crude distillation unit, is located in the refinery. Motiva did not respond to a request for comment. CDUs are typically the first step in the refining of crude oil, converting it into feedstocks that can be used by other processing units. All units that were shut down by the storm are now back in production. The units that have been restarted include the?18,000 bpd unit of alkylation, the?57,000 bpd delayed coker-1 and the 49,000 bpd catalytic Reformer-4. Cokers are used to convert residual crude oil from distillation units, into motor fuels and petroleum coke. Different?processes are used by alkylation units and reformers to create octane boosting components that are used in premium gasoline blends.
African Rainbow Minerals profits up 19% with higher platinum prices
African Rainbow Minerals posted a %19% increase in its annual profit on Friday, as higher platinum group metals prices helped offset lower incomes from its coal and iron ore divisions.
The South African mining company's earnings for the year ended 30 June were 3.201 billion rand, compared to 2.695 billion.
ARM announced that it would pay a final share dividend of 7 Rand, compared to 6 Rand per share in the previous year.
After metal prices increased by more than 50%, the company's PGM operation returned to a?profit. The headline earnings were 1.345 billion Rands, compared with last year's loss of 1.288 billion Rand.
The ferrous division of the company, which includes iron ore and Manganese, saw a 42% drop in its headline earnings, to 2.028 billion Rand.
Mothballing of Mines Reduces IRON ORE Earnings
The Beeshoek Mine was closed last November, and the sales volume dropped by 75%. This had a negative impact on the income from the iron ore business.
The headline earnings at ARM’s other iron ore mining, Khumani also declined?significantly, despite increased export volumes, due to a strong rand. Manganese revenue was also affected by the lower mineral prices and stronger rand.
The coal unit suffered a loss of 428 million rands, as opposed to a profit of 47 million rands last year, due mainly to lower prices.
ARM announced in July that it would upgrade its?Bokoni Platinum operations over a period of 15 billion rands, and resume nickel mining?at Nkomati.
Bokoni is expected to peak in 2032 and produce between 350,000 - 400,000 ounces of PGMs per year, which would be double the current output from ARM.
ARM will restart open-pit mining operations at Nkomati which were idled in 2020. Nkomati is now producing 56,065 tonnes annually following an agreement with Boliden of Sweden.
(source: Reuters)