Member Info for Jiving

Hi Extrader

My take on the Glencore staff departures was that another Swiss commodity trader, Vitol, was poaching from their Swiss rivals to build a new iron ore trading desk. Weinstein is described as an 'originator' which means he is on the 'buy' side of the business responsible for negotiating & documenting supply/offtake deals with iron ore miners. The other Glencore leaver Ahuja appears to be on the 'sell' side, currently in Glencore's Indian operation presumably covering the Indian steel companies/customers seeking iron ore. I didn't read a specifically ZIOC angle into the hires, but it might make sense for Ma'aden to say take a stake in an existing trader & encourage them to move into areas they want covered, rather than trying to build a 'go it alone' trading desk.

Weinstein's missing years were at a Russian bank, but his timing was just before Ukraine & sanctions killed off their international business so he moved back to Glencore. As he is on the 'buy' side it made sense for Hill to have him on the BOD & likely take day to day responsibility for negotiating/documenting on Glencore's behalf. Indeed when I first read the article my concern was that his departure might delay documentation, but hopefully Glencore have others who can take over that role (although whether he is replaced on the BOD, likely depends on whether a buyout deal is imminent making a change superfluous).

Those reported to have left for Vitol include ZIOC director Peter Weinstein:

"The departures from Glencore include originator Denis Weinstein, and Kunal Ahuja who worked across multiple commodities including iron ore, who have already agreed to join Vitol, according to the people. Peter Hill, Glencore’s head of iron ore, plans to stay with the company, according to one of the people."

https://www.mining.com/web/vitol-hires-glencore-trafigura-iron-ore-traders-in-metals-push/

All of which tallies with this description in the 2023 Interims, RNS 29.09.23:

"Furthermore, port infrastructure discussions are underway with a large port infrastructure development firm seeking to expand the existing port of Pointe-Noire. Consideration is also being given to potential development solutions for a large bulk mineral port capable of supporting the 30Mtpa staged development project."

My take on that tweet & the TG chat summary is that we are 'still in the game'.

Https://twitter.com/NuformixPlc/status/1833759630473764956

Whoops minor issue of getting the decimal point wrong, should of course be 0.14p not 100x that at 14p. And to think I can remember when the share price was 14p - once upon a time not so long ago.

A 14p share price based on a trade worth 3p.

This is also something that aggravates our position, the absolute unregulated anarchy of trading on the London stockmarkets.

IMO the new owner will decide the port contract, which is why its been left 'vacant'.

Hadn't seen you had already posted the Vale/trillion link MM. Think we must get the same news feed from Mining.com

Re-development bank loan/grant finance. I have thought this was a possibility ever since since Marty started emphasising the green/development angles of the project vs the more traditional investor arguments. It was as if he were primarily pitching to green/developmental investors as opposed to regular financial investors who focus on NPV/IRR. It is an interesting alternative given the vast funds Western governments are throwing at anything 'green'. Alternatively it might be just another Elphick/Glencore gambit to try & nudge a higher bid out of the Saudis.

September surely must be the month we finally find out.

The cost to transform the mining and steel sectors into zero-carbon industries could exceed $1 trillion, according to Vale’s CFO Gustavo Pimenta. “When we model the entire production chain, we’re talking about more than a trillion,” said the Vale executive during the Fronteiras da Mineração conference, organized by Brazil Journal.

“Carbon tax is very important because, in a way, it will direct capital allocation and provide incentives for producers.” “There will come a time when you’ll have to pay, for example, to sell a carbon-intensive pellet to Europe, and this will force companies to consider solutions like briquettes, which have a smaller carbon footprint.”

https://www.mining.com/vale-estimates-carbon-free-cost-for-mining-and-steelmaking-at-over-1-trillion/

MM its interesting you state Marty was in Korea - do you have a link to that info or if not what is the source?

Incidentally have not seen it mentioned here yet, but CityG on the TG board is organising a written question & answer exercise with Dan.

Thats an interesting possibility Soup. That's its Peel clearing their books of the last placing - in order to be ready for the next?

We still have 35m options which have also not yet been exercised. I believe that we have to be RNSd on warrant/option exercise as it immediately affects the number of shares outstanding. Back in 2020 a warrant holder exercised & it was immediately reported.

Chab, this typeof PnD is of a completely different type & scale to those we have seen before. I have also not seen it in other small stocks, is it AI related, are they making money? The old style PnD led by people like the Earl was relatively small scale & usually seemed to end in losses for the Earl's team if not for the Earl himself.

“I’d say we don’t intend as Fortescue to compete against that ($US80), we’ll be producing a new product which the world wants which is green iron ore,” he said.

“If we needed to place 100 million tonnes of green metal we could do that this afternoon, there are literally a wall of buyers out there for green metal. We can take big steps but not if we don’t take a whole heap of fast little steps.”

https://thewest.com.au/business/mining/andrew-forrest-says-iron-ore-price-will-not-fall-under-us80-a-tonne-c-15689880

The last 2 weeks of trading have been grotesque, clearly artificial/false markets manipulated by 'whoever'. No benefit to shareholders or the company & the utterly worthless 'regulatory authorities' do nothing. Just when you thought things couldnt get worse...

I agree completely that long term investment decisions & the FS are based on less volatile long term prices. But realistically sentiment is affected by current market conditions, particularly when a key figure like $100 is taken out & $80 could be next. It all depends where we are in the process. If we have agreed price/terms (for outright sale or JV) and are in the process of finalising documentation, then we are are not dependent on sentiment. I set out on Sunday/Monday in considerable detail some of the reasons I am hopeful that we are indeed moving into the documentation phase. Which if it's a straightforward mine sale shouldn't be more than around 2 months from the end of June.

But if we are still in the haggling stage - & there is a significant gap between a potential buyer's maximum price & Elphick/Glencore's minimum price - then a backdrop of a collapsing iron ore price is not conducive to squeezing more out of a potential buyer. Indeed frankly it would be time for our team to grab whatever is on the table. Especially given they set themselves a target of a strategic investor by end March & we are already nearly 5 months past that.

Many thanks for commenting Shaun - you did read the articles, right? The iron ore price is of course of crucial importance to a company with one single asset - namely an iron ore mine.

First off its not 'me' painting a grim picture, it is specialist commodity analysts who cover the iron ore market who in turn are reporting the collapsing iron ore price in Asia. Which itself is driven by the dire circumstances of the steel market in China, which in turn is a function of the collapsing Chinese property development sector.

Second, 62% is the key industry traded price and when it goes significantly below $100 that is not good news. Of course higher grade ore goes for a margin above 62% - but a collapsing 62% price drags down all grades. On the other board you can see a post from yesterday, where I point out figures from an RTZ presentation that show in the event of a $100 carbon tax that the premium for 67% vs 62% could rise to up to $80 a ton.

Couple of articles painting a grim picture for the short term outlook for iron ore:

https://www.macrobusiness.com.au/2024/08/iron-ore-primed-to-crash/

“We have a hard time understanding why iron ore is still managing to just hang onto $100,” said Westpac’s head of commodity and carbon strategy, Robert Rennie. “Iron ore prices should be in the mid- to late-$US80s given the absolute carnage going on in steel markets quietly in the background.”

https://www.afr.com/markets/commodities/carnage-in-steel-markets-to-sink-iron-ore-below-us90-20240812-p5k1l9

On the RTZ website there is copy of a presentation: 2023 Invest Seminar Sydney. P.29 references calculations of the premium for 67% vs 62% with an increased carbon tax, this was the result;

At $100/t CO2 penalty.

67%Fe DRI/EAF (gas DRI) = +$60-80 (over 62%)

67% Fe DRI/EAF (H2 DRI) = +$80