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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 a minority stake at 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, in a filing to the stock exchange after publication of the article, said that it has a history of partnerships with its assets and explores options that could create value for its shareholders. BHP also stated that its Western Australian Iron Ore Business remained central to BHP’s portfolio, and that the company remained fully committed both to Western Australia and to this business. 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 a majority stake in the mine. Minority shareholders Itochu and Mitsui are Japanese trading houses. BHP said its share was worth $3.2 billion at the time of mine opening in 2014. BHP produced 62.5 million tonnes of iron ore in fiscal 2026. At current prices, that's worth $6.2 billion. This accounted for about a quarter BHP's production of the main steelmaking ingredient. Australia is a top destination for Chinese investors Bankers who are familiar with BHP's operations 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 China Mineral Resources Group. CMRG has been negotiating with miners for steel mills and has banned them from purchasing certain products in order to win concessions during contract negotiations. BHP and CMRG settled a dispute that lasted more than six months in April. This 'opened the door' for steel mills to buy certain cargoes including Jimblebar Fines which had been blacklisted. To spread risk, miners tend to sell stakes to new projects as opposed to well-established mines like Jimblebar. Baowu had previously partnered with Australian miner Rio Tinto, for example in a deal signed with Rio Tinto dated 2022 to develop a 2 billion dollar iron ore mining project also in the Pilbara area of Western Australia. Australia used to be a popular destination for Chinese investors. However, investment has been declining?for many years due to national security concerns. Canberra has also blocked Chinese purchases of lithium and rare Earths. China no longer ranks among the top 10 foreign investment countries in Australia.
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Malaysia declares an emergency in Serian district, Sarawak due to haze
Malaysia declared an emergency on Friday in the district of Serian in Sarawak after thick haze from forest fires in?Indonesia caused air pollution to reach 'hazardous' levels. Sarawak on Borneo has been severely affected by the fires that have ravaged the Indonesian side. Haze forced the closure of schools in certain parts of the state. Malaysian authorities classify Air Pollution Index (API), readings over 300, as hazardous. A measurement of 500 is the threshold to declare an emergency. Government data revealed that the API in Serian reached 519 on Friday. Anwar's Office said that the king of Malaysia, Sultan Ibrahim, issued an emergency declaration after receiving advice from Sarawak Premier?Abang johari Openg and Prime Minister Anwar Ibrahim. The statement stated that "Sultan Ibrahim has consented to a declaration of a state if emergency in the Serian district of Sarawak due to haze conditions which have reached an air pollution level dangerous to public safety and health." Douglas Uggah Embas, the chairman of Sarawak's disaster management committee, had told a press conference earlier that the state had asked for an emergency declaration when API readings exceeded 500. Douglas stated that the emergency situation would only affect the Serian district, which covers an area of approximately 20 km (12 miles). Douglas also said that essential services such as supermarkets, petrol pumps, and banks should continue to operate. He added that cloud-seeding was also carried out. Malaysia is a constitutionally monarchy where the king plays a mostly ceremonial role and executes his duties on advice from both the prime minister and cabinet. The'monarch' has the authority to declare an emergency if there are grave threats to the national security, economy or public order.
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Volkswagen's unexpected turnaround deal avoids a showdown when job cuts are looming
Volkswagen shares reached a?11-week peak after the supervisory board of Europe's biggest automaker late Thursday struck?an ambitious turn around agreement that focused on sweeping cuts in jobs and avoided a conflict between major stakeholders. The agreement on the largest restructuring in the group’s 89-year-old history includes another 50,000 job reductions, bringing the agreed total to 100,000. It also leaves the future of four German plants open. Volkswagen is also under pressure, along with most of its European counterparts, from the 'painful tariffs' in the United States and the falling sales in China, a former cash cow, as well as aggressive Asian competitors entering the stagnant European market. All of these factors have eaten into the operating margins for the group, which was 3.8% in the half-year, down from 7.9% at its peak in '2022, the last decade. Analysts and shareholders expressed relief at the fact that Volkswagen, with its 650,000 employees and complex structure, and a number of powerful stakeholder groups is still able to take important decisions during times of crisis. Volkswagen shares rose 5.8% to their highest level since June 18 at 0903 GMT. They were the second biggest gainer in the pan-European STOXX 600 Index. Moritz Kronenberger, a shareholder in Volkswagen, said that the agreement was a good sign for Volkswagen as well as the capital markets - even though it would mean severe cuts to the group and its workforce. The ball is in the hands of the executive committee. He said that there are no excuses for the implementation of the program. The supervisory board was outnumbered by the unions, and Lower Saxony, on the management side. This would have created a stakeholder conflict unprecedented at the automaker. Volkswagen CEO Oliver Blume had previously stated that the German operations would be responsible for half of the savings. This would mean around 25,000 jobs being cut. The details of the job-cutting program will need to be hammered between management and the unions. As part of an earlier turnaround package in 2024, they secured job guarantees for most of Volkswagen's German operations up until 2030. Citi analysts said, "We're pleased that this agreement was reached." This agreement does not change the EU's competitive environment, China's continued market share losses, or raw material cost pressures. Volkswagen is looking for alternatives to its German plants located in Emden and Hanover. Zwickau, Neckarsulm, and Zwickau could be repurposed under new ownership.
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France will give more than EUR1 Billion in aid to weather-hit farmers
France announced on Friday that it would be providing more than EUR1 billion ($1.16 billion), in aid to farmers, after record heatwaves caused major damage to crops, pastures, and water supplies. Paris is trying to control the deficit in order to prepare for the 2027 presidential elections. Annie Genevard, Agriculture Minister, told reporters that "one billion euros is a massive effort in the current budgetary environment." She said that about?half, or EUR520 million, of the package would be used to provide quick payments for weather damage. A local recovery fund is also created as part of the aid plan to assist farmers in buying seeds, plants and animal feed after droughts have dried up farmland. Other measures include land tax relief, assistance with?social security payments and fuel subsidies. The FNSEA (France's largest 'farmers' 'union) estimates that agricultural production losses in France this summer will exceed EUR10 billion. This includes both the livestock and crop sectors. A heatwave is forecast for?this coming week in?the?largest farm producer of the European Union.
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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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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.
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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.
The soft dollar sets a 10-week streak of saving
The copper price was'stable' on Friday but is expected to end the week higher due to a drop in the U.S. Dollar, which has offset any pressure caused by falling supply fears.
By 0710 GMT, the benchmark three-month copper price on London Metal Exchange had risen only by 0.03% to $14,337.5 per metric tonne. This put the metal on course to gain?by the exact same amount this week. It would be the tenth consecutive weekly gain.
The Shanghai Futures Exchange's most traded?copper contract advanced 0.22%, to 108 780 yuan (16,208.24 dollars) per ton.
After dovish comments by Fed Governor Christopher Waller, the dollar fell overnight. CME's FedWatch shows traders now?pricing even odds for a September rate increase, down from nearly two-thirds of the time a day ago.
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. Resurgent interest rates fears and market perceptions that physical supply is less tight weighed down trading in the early part of the week. LME copper’s cash-to-3-month spread
Aluminium also fell by 0.09 % on the LME. It is expected to finish the week with a 2.05% increase.
The Cash-to-three-?month
After paring down earlier gains which saw it reach 24,510 yuan per ton, the highest since June 4, the SHFE aluminium prices added 0.06%.
Other available zinc stocks at SHFE-monitored storage facilities
Zinc gained 0.35% on the?LME, while?lead gained 0.29 %, nickel fell 0.18%, and tin dropped by 0.5%.
Nickel lost 0.72%, tin gained 0.28%, and zinc increased 0.43%.
(source: Reuters)