Leading miners likely to reap bumper profits
By William MacNamara 2010-03-31

The world’s top iron ore miners are expected to see a big rise in profits this year after the move to a pricing system that better reflects fundamental demand.

Iron ore was the most profitable commodity last year for Rio Tinto, BHP Billiton and Vale, the world’s three big producers.

That was when the average price was $60 per tonne, according to a benchmark pricing system that is now at an end.

In the first three months of 2010, the average iron ore spot price, which will guide quarterly prices from now on, was $131 per tonne.

If BHP charged an average of $131 per tonne this year, its net earnings would increase by $5.7bn year-on- year, according to its own estimate in February that a $1 per tonne variance would change net profits by $80m for 2010. BHP’s annual group earnings were $6.4bn for its fiscal year ending June 2009.

The new formulas for calculating iron ore prices will vary from company to company, as will the financial impact. But the BHP estimate signals the extraordinary boost in profits that the big producers can expect if rising steel demand keeps the spot price above $100 per tonne.

An industry executive said that the big three producers should each conservatively expect a boost of about $5bn or more this year.

This raises the possibility of special dividends, share buy-backs, or renewed corporate activity.

A windfall would be especially welcome at Rio, the second-biggest global producer, which is still trying to reduce its net debt and compensate for the underperformance of Alcan, its aluminium division.

Rio estimates that a 10 per cent increase from the 2009 iron ore price would lift its underlying earnings by $638m. This implies that a doubling of the price from last year – which is now plausible – would translate to $6.38bn more in underlying earnings for 2010.

Much higher dividends this year are likely for all three producers but especially BHP, which already held $8.3bn in cash at December 2009.

Alex Vanselow, chief financial officer, told the Financial Times in February that BHP’s spending priority was reinvesting in its existing businesses. Share buy-backs were not a preferred use of cash, he said. Perennial expectations that BHP would make a big acquisition were disappointed, he added, because there were few targets that meet BHP’s standards.

Higher profits at Vale, the world’s biggest producer, could help the company fund its $12.9bn spending programme this year.

But higher prices will also lure “marginal”, higher-cost mines into production, chipping away at the incumbents’ market share. Meanwhile, huge new mines – such as Anglo American’s Minas Rio project in Brazil – will start producing from 2012, possibly easing prices, to the relief of steelmakers.

But for the next few years, the big producers are in an excellent position, according to analysts at Liberum Capital in London. Iron ore mining has unusually high barriers to entry. That makes it hard for other producers to catch up in the short term.

三大铁矿石生产商利润有望暴涨
英国《金融时报》 威廉•麦克纳马拉 2010-03-31

在转向使用一个更能反映根本需求水平的铁矿石定价体系之后,今年全球顶级铁矿石生产商的利润预计将大幅增长。

对全球三大铁矿石生产商——力拓(Rio Tinto)、必和必拓(BHP Billiton)和淡水河谷(Vale)来说,铁矿石是它们去年最赚钱的大宗商品。

在现已被淘汰的基准价格体系中,去年铁矿石的平均价格还只有每吨60美元。

在2010年前3个月,现货铁矿石平均价格已达每吨131美元。从现在起,现货价格将是铁矿石季度价格的指导价。

按照必和必拓在2月份的估计,即每吨1美元的价格变化将对其2010年的净利润产生8000万美元的影响,如果它今年按每吨131美元的均价出售铁矿石,其净利润将同比增加57亿美元。在其2009年6月结束的财年,必和必拓集团的年度盈利为64亿美元。

不同公司对铁矿石价格变化有不同的计算方式,对其财务影响也是如此。但必和必拓的预测表明,如果不断增长的钢材需求让现货铁矿石保持在每吨100美元以上,大型生产商的利润预计将出现巨额增长。

一位业内高管表示,保守估计的话,上述三大铁矿石生产商中,每家的利润今年将会增加50亿美元或更多。

这就带来了发放特别股息、股票回购或企业并购活动再度涌现的可能性。

这样一笔意外之财对力拓而言,将特别受到欢迎。这家全球第二大铁矿石生产商仍在努力减少净债务,并弥补下属铝业部门加拿大铝业(Alcan)的亏损。

力拓估计,若铁矿石价格较2009年提高10%,其基本收入将增加6.38亿美元。这意味着如果价格较去年翻番(目前来看有可能),那2010年基本收入将起码增加63.8亿美元。

三大铁矿石生产商今年都很可能发放更高的股息,必和必拓尤其如此。截至2009年12月,该公司已经拥有83亿美元的现金。

该公司首席财务官亚历克斯·凡斯洛(Alex Vanselow)2月份对英国《金融时报》表示,必和必拓的优先支出方向是对现有业务进行再投资,股份回购并非现金使用的首选。他补充说,一直在猜测公司将进行大规模收购的人士感到失望,是因为符合必和必拓收购标准的目标公司很少。

淡水河谷是全球最大的铁矿石生产商,对它来说,更高的利润将能帮助该公司为今年129亿美元的支出计划提供资金。

但较高的铁矿石价格也将吸引“边缘的”、成本较高的矿山投入生产,从而侵蚀三大生产商现有的市场份额。同时,大型的新矿山,如英美资源集团(Anglo American)的Minas Rio项目,将从2012年开始投产,有可能缓和价格走势,纾缓钢铁生产商的压力。

但伦敦Liberum Capital公司的分析师认为,未来数年,大型铁矿石生产商将处于非常有利的地位,因为铁矿石开采业具有非常高的进入壁垒,这使得其它生产者很难在短期内迎头赶上。

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