Category: Stock Market

It has been another busy week for Australia’s top brokers. This has led to the release of a large number of broker notes.

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Accent Group Ltd (ASX: AX1)

According to a note out of Goldman Sachs, its analysts have retained their buy rating on this footwear focused retailer’s shares with an improved price target of $3.10. The broker believes that the market is underestimating the company’s full earnings potential. It highlights that this comprises an attractive distribution business, a set of vertically owned brands, and a portfolio of strong retail banners. Importantly, it continues to believe Accent is well protected from a potential slowdown in discretionary spend given its exposure to a younger consumer and performance footwear. The Accent share price is trading at $2.34 this afternoon.

Allkem Ltd (ASX: AKE)

A note out of Morgans reveals that its analysts have retained their add rating on this lithium miner’s shares with a slightly trimmed price target of $15.10. The broker believes that Allkem could be an attractive takeover target in the lithium industry. This is due to its cheap valuation and significant lithium resource. The Allkem share price is fetching $11.96 today.

Pilbara Minerals Ltd (ASX: PLS)

Analysts at Citi have retained their buy rating on this lithium miner’s shares with a modestly reduced price target of $4.60. This follows news that the company’s board has approved the expansion of its spodumene production to 1 million tonnes per annum. And while the costs are more than it was expecting, it isn’t overly surprised in the current inflationary environment. The Pilbara Minerals share price is trading at $3.98 this afternoon.

The post Brokers name 3 ASX shares to buy now appeared first on The Motley Fool Australia.

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More reading

• ‘Sky-high demand’: 2 ASX 200 mining shares that could head to the moon
• 7 ASX dividend shares you can buy for under $10
• 5 things to watch on the ASX 200 on Friday
• Attention lithium investors: This ASX 200 mining billionaire says Australia could become a battery chemical manufacturing powerhouse
• Here are the 3 most heavily traded ASX 200 shares on Thursday

Motley Fool contributor James Mickleboro has positions in Allkem. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Accent Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Wesfarmers Ltd (ASX: WES) share price has performed well in March 2023, rising by 4% over the month at the time of writing. That compares to a fall of around 1% in the past month for the S&P/ASX 200 Index (ASX: XJO).

The ASX 200 is made up of a number of businesses including BHP Group Ltd (ASX: BHP), CSL Limited (ASX: CSL) and numerous ASX bank shares.

What happened to the ASX 200?

With banks playing such a large role in the ASX 200, any worries about the banking sector can have a sizeable hit on the ASX 200.

At the time of writing, the banks are showing a sizeable decline over the last month, including the Commonwealth Bank of Australia (ASX: CBA) share price being down 2.6%, the National Australia Bank Ltd (ASX: NAB) sliding being down 8%, the Westpac Banking Corp (ASX: WBC) share price dropping 3.5%, the ANZ Group Holdings Ltd (ASX: ANZ) share price being down 7% and the Macquarie Group Ltd (ASX: MQG) share price falling 7.4%.

Combined, the ASX 200 banks had a bad month amid the difficulties for the banking sector in the US and Europe.

Silicon Valley Bank (SVB) collapsed, though depositors were saved and now First Citizens is buying the venture capitalist-focused bank.

Investment bank Credit Suisse was saved by UBS amid concerns about its operations.

While the bank share prices suffered over the month, ASX 200 banks have been telling investors that they are well-capitalised and can get through any difficulties.

Did anything specific impact the Wesfarmers share price?

The company may have seen some volatility amid the worries about contagion from the banking worries.

However, Wesfarmers isn’t a bank, so may not have been impacted as much.

Plus, the Wesfarmers share price continues to recover from the lows seen in 2022.

It didn’t announce anything that was market sensitive to investors this month, the FY23 half-year result was released last month. The business also went ex-dividend last month, so that wasn’t an impact on the Wesfarmers share price either.

But, the company did provide a presentation for its chemicals, energy and fertilisers (WesCEF) business where it outlined its portfolio of “complementary businesses” with “clear competitive advantages”.

Wesfarmers pointed out that these businesses have achieved “market-leading performance”, with “continuous productivity improvements”.

It also pointed out that it has a track record of “successful expansion through incremental investment with significant further opportunities providing a pipeline for growth”.

WesCEF also has “major project and chemical processing experience that can be leveraged into emerging sectors” such as lithium. The company is currently working on the Mt Holland lithium project.

Wesfarmers share price snapshot

Since the start of 2023, the business has risen by around 10%.

The post Why did the Wesfarmers share price outperform the ASX 200 in March? appeared first on The Motley Fool Australia.

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More reading

• 2 high quality blue chip ASX 200 shares named as buys by analysts
• $1,600 annual dividend income from a $20,000 ASX share portfolio? Here’s how
• How to make passive income for life with just $5 a day
• Is time running out to buy high-yield ASX dividend shares?
• The whopper Wesfarmers dividend is being paid today. Here’s what you need to know

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has positions in and has recommended Macquarie Group and Wesfarmers. The Motley Fool Australia has recommended Westpac Banking. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The AMP Ltd (ASX: AMP) share price is in the red as the company prepares for shareholders to reject its remuneration report at today’s annual general meeting (AGM).  

Investors appear to have hit back at management on the back of a tumultuous February for the stock. It tumbled 23% last month amid the release of the company’s full-year earnings.

The company’s chair Debra Hazelton also addressed concerns over the rollout of the promised $1.1 billion capital return and how AMP Super votes on climate resolutions in a speech published to the ASX.

The AMP share price is $1.072 at the time of writing, 0.74% lower than its previous close.

Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is rising 0.71%.

Let’s take a closer look at what the company’s chair told investors at its AGM.

AMP share price falls amid AGM

The AMP share price is underperforming after Hazelton acknowledged expectations its remuneration report will face a “disappointing” first strike.

A first strike will be called if upwards of 25% of the company’s shareholders vote ‘no’ to its bonuses. AMP expects to take the hit based on votes cast prior to today’s meeting. Hazelton said:

While we have already made significant changes to our remuneration framework over the past 12
months based on comprehensive engagement with investors, proxy advisors, remuneration experts
and regulators – we remain keen to understand and respond to feedback.

Such feedback pointed to the board’s decision to award a bonus higher than the scorecard outcome and concerns about undisclosed short-term incentives. Hazelton stated AMP is continuously working to improve disclosures and remuneration was allocated “holistically” based on the 2022 scorecard and other factors.

Though, she admitted the stock’s February falls “may have coloured shareholders’ views of management’s performance”.

On that note, she dubbed the AMP share price’s recent performance “extremely disappointing” but said, while the company’s leaders are mindful of day-to-day gains and falls, they remain focused on the long term.

Over time, the company’s stock should rise on the execution of its strategy and commitments, according to the chair.

One such commitment is its $1.1 billion capital return, which it plans to fast-track in response to shareholder angst.

Investors were asked to vote to allow another 500 million AMP shares to be bought back over the coming year.

She also clarified how AMP Super votes are decided by third-party fund managers. However, in a move that “indicates how important AMP regards climate risk”, it recently moved to direct managers to vote on the topic of climate risks for select energy, materials, and utility companies, where possible.

Meanwhile, the ASX 200 chair looked back at prior challenges facing the company. Hazelton reportedly responded to an aggrieved shareholder saying, as per the Australian Financial Review:

The [Hayne] royal commission upended AMP’s business model.

It had an enormous effect – almost existential.

The AMP share price remains around 80% lower than it was prior to the 2018 royal commission.

The post AMP share price slips amid expected first strike on remuneration appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Sunk $3,000 into AMP shares 5 years ago? Here’s how much passive income you’ve realised
• Are AMP shares set to become a dividend machine?
• If I had bought $5,000 AMP shares a week ago, here’s how much I’d have now!
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week on a positive note. At the time of writing, the benchmark index is up 0.75% to 7,175.5.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are charging higher:

Block Inc (ASX: SQ2)

The Block share price is up 3.5% to $102.41. This follows a strong night for the payments company’s NYSE listed shares. Bargain hunters appear to have been taking advantage of recent share price weakness caused by a short seller attack.

Novonix Ltd (ASX: NVX)

The Novonix share price is up 11% to $1.29. This morning, this battery materials company announced a joint venture agreement with TAQAT in the Middle East and North Africa (MENA) region. The two parties will develop and produce anode materials for electric vehicle and energy storage system batteries. A facility will be constructed in Saudi Arabia as part of the agreement.

Piedmont Lithium Inc (ASX: PLL)

The Piedmont Lithium share price is up 4% to 88 cents. This morning, this lithium developer revealed that the US$80 million restart of its North American Lithium (NAL) project has been completed on time and on budget. Commercial spodumene concentrate production is now underway at the Canada-based project, with shipments expected to commence in the third quarter.

Syrah Resources Ltd (ASX: SYR)

The Syrah share price is up 8% to $1.82. Yesterday, this graphite producer released a mineral resource update for the Balama project. This update went down well with analysts at Macquarie. In response, the broker has retained its outperform rating and $2.30 price target on the company’s shares. This implies potential upside of 26% for investors over the next 12 months even after today’s strong gain.

The post Why Block, Novonix, Piedmont Lithium, and Syrah shares are racing higher appeared first on The Motley Fool Australia.

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More reading

• Why is the Sayona Mining share price having such a stellar end to the week?
• Piedmont Lithium share price surges 6% on ‘exciting milestone’
• ‘Very excited’: Why the Novonix share price is leaping 14% on Friday
• Why Appen, Regis Resources, Syrah, and Zip shares are charging higher today
• Leading brokers name 3 ASX shares to buy today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block. The Motley Fool Australia has positions in and has recommended Block. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Lake Resources NL (ASX: LKE) share price is trading 2.1% lower at lunchtime on Friday at 46 cents.

What a shocker of a month for this ASX lithium share, which has slid 27% over the period.

By comparison, the S&P/ASX All Ordinaries Index (ASX: XAO) is up 0.75% today and down 1.2% for the month.

Why is the Lake Resources share price drowning?

A bearish outlook for lithium prices is one challenge, but that’s universal to all ASX lithium shares.

What’s unique to Lake Resources is a recent $3.9 million insider sell-down and an ongoing short attack.

As my Fool colleague James reported on Monday, Lake Resources non-executive chairman, Stu Crow, sold 7.92 million shares on-market between 17 March and 23 March.

Crow received a total consideration of $3.89 million, meaning he sold for an average price of 49.16 cents per share.

A large-scale insider sell-off tends to make investors nervous. The company sought to allay fears by issuing a statement saying the sale was made “under advice to meet personal financial obligations”.

Lake said Crow was a founding shareholder and remained one of Lake’s biggest private investors.

It said he still owned 10 million shares and had no intention of selling any more in the foreseeable future.

Lake Resources has also been grappling with an ongoing short attack by a United States short-selling activist group called J Capital. They don’t believe Lake Resources can deliver on its targets.

Is this ASX lithium share now cheap enough to buy?

Well, if you have faith in top brokerage firm Bell Potter, then the answer is a “hell, yes”.

Bell Potter thinks the Lake Resources share price could grow five-fold in the next 12 months.

The broker has a speculative buy rating on the lithium share with a price target of $2.52.

Note that the rating is speculative, though. This is Bell Potter’s way of acknowledging there are risks.

Here’s something that’s also interesting to note.

Six months ago, Lake Resources had 10.13% of its stock shorted.

This basically means a decent number of pro traders expected the stock price to fall, so they shorted it.

Since then, the Lake Resources share price has fallen by 49.9%.

Today, 6.09% of the capital is shorted, which demonstrates a 40% reduction in short positioning on the lithium stock.

What else is going on with Lake Resources?

In its half-year accounts lodged with the ASX on 15 March, Lake Resources revealed a 1H FY23 loss of $13.46 million, up from a loss of $4.62 million in 1H FY22.

Of course, you have to take this with a grain of salt. Lake is still building its mining assets and therefore not producing any lithium to sell yet.

Lake Resources has cash and cash equivalents totalling $133 million and its liabilities total about $8 million.

Looking ahead, Lake Resources expects to complete its definitive feasibility study for producing 50,000 tonnes of lithium carbonate per year by the middle of 2023.

The post Down 27% in a month, is the Lake Resources share price finally cheap enough to buy? appeared first on The Motley Fool Australia.

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More reading

• Why Appen, Harvey Norman, Healthco, and Lake shares are dropping today
• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today
• Why Lake Resources, Latitude, Synlait, and Woodside shares are falling today
• Lake Resources share price plummets 12% following $3.9m insider sell-off

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) is on course to end the week with a decent gain. In afternoon trade, the benchmark index is up 0.7% to 7,172.3 points.

Four ASX shares that have failed to climb with the market today are listed below. Here’s why they are dropping:

Appen Ltd (ASX: APX)

The Appen share price is down 6.5% to $2.84. This may have been driven by profit taking from investors after the artificial intelligence data services company’s surged higher. In fact, even after this sizeable decline, the Appen share price is up 22% since the start of the month.

Harvey Norman Holdings Limited (ASX: HVN)

The Harvey Norman share price is down over 3% to $3.60. This has been driven by the retail giant’s shares going ex-dividend this morning. Eligible shareholders can now look forward to receiving this fully franked 13 cents per share interim dividend in their bank accounts in a little over a month on 1 May.

Healthco Healthcare and Wellness REIT (ASX: HCW)

The Healthco share price is down 6% to $1.34. The catalyst for this has been the property company completing an institutional placement and entitlement offer. The company raised approximately $208 million at $1.35 per new share. It will now raise a further $112 million via an underwritten retail entitlement offer.

Lake Resources N.L. (ASX: LKE)

The Lake Resources share price is down almost 4% to 45.2 cents. This lithium developer continues to underperform its peers and is now down almost 28% month to date. That’s despite the rest of the industry hurtling higher this week following some major M&A news. One short seller has been targeting Lake due to doubts over its DLE technology.

The post Why Appen, Harvey Norman, Healthco, and Lake shares are dropping today appeared first on The Motley Fool Australia.

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More reading

• Down 27% in a month, is the Lake Resources share price finally cheap enough to buy?
• Why is the Harvey Norman share price diving on Friday?
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today
• Why Appen, Regis Resources, Syrah, and Zip shares are charging higher today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Appen and Harvey Norman. The Motley Fool Australia has positions in and has recommended Harvey Norman. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Westpac Banking Corp (ASX: WBC) share price is on course to end the week on a mildly positive note.

At the time of writing, the banking giant’s shares are up 0.25% to $21.75.

However, despite this, the Westpac share price remains down almost 7% since the start of the year.

Investors may now be wondering if this is a buying opportunity. Here are three reasons I think buying Westpac shares is a no-brainer.

Strong capital position

A lot of the weakness in the Westpac share price this year has been driven by the banking crisis.

While seeing banks go out of business is always unnerving, it is worth noting that Westpac and the rest of the big four are among the most liquid in the world.

As I mentioned here last week, Westpac has a CET1 ratio of 11.13%, a net stable funding ratio (NSFR) of 139%, and a liquidity coverage ratio (LCR) of 122%. These are all comfortably ahead of requirements.

I believe this makes the recent pullback an overreaction and an opportunity for investors to pick up shares at a discount.

Cost cutting

Another reason I am bullish on the Westpac share price is its cost-cutting plans.

Australia’s oldest bank is aiming to reduce its cost base to $8.6 billion by FY 2024. This compares to its ‘ongoing’ cost base of $9.1 billion in FY 2021.

This is particularly positive in the current inflationary environment, which has seen many other companies (including other big four banks) reporting sizeable increases in their costs.

For example, last month, Commonwealth Bank of Australia (ASX: CBA) reported a 5% or $283 million increase in its first-half operating costs to $5.77 billion.

Together with the benefits of rising interest rates, Westpac’s lower cost base should be a boost to its bottom line and, ultimately, its dividends. Speaking of which, this leads us to the third reason to be bullish.

The Westpac dividend yield

One positive from falling share prices is that the potential dividend yields on offer become more attractive.

For example, Goldman Sachs expects Westpac’s earnings growth to underpin fully franked dividends per share of $1.47 in FY 2023, $1.56 in FY 2024, and then $1.65 in FY 2025.

Based on the latest Westpac share price, this will mean monster yields of 6.75%, 7.2%, and 7.6%, respectively.

And with Goldman having a conviction buy rating and a $27.74 price target on its shares, there’s also potential for some big capital gains as well.

The post Does the Westpac share price fall make it a no-brainer buy? appeared first on The Motley Fool Australia.

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More reading

• Guess which ASX 200 bank stock UBS says is the most over-priced right now
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• Bendigo Bank shares worst of the ASX 200 banks following UBS downgrade
• Morgans says these are some of the best blue chip ASX 200 shares to buy now
• Is right now a once-in-a-decade opportunity to buy ASX 200 bank shares?

Motley Fool contributor James Mickleboro has positions in Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In afternoon trade, the Commonwealth Bank of Australia (ASX: CBA) share price is on course to end the month on a positive note.

At the time of writing, the shares of Australia’s largest bank are up 0.5% to $98.22.

However, unless something spectacular happens between now and the market close, this won’t stop its shares from recording a disappointing monthly decline.

As things stand, the CBA share price is on track to post a 2.3% decline in March.

Why is the CBA share price under pressure this month?

Investors have been selling down the CBA share price this month due to concerns that rising interest rates were causing a global banking crisis.

This followed the collapse of Silicon Valley Bank and Signature Bank in the United States, as well as Credit Suisse in Europe.

It wasn’t just CBA shares that came under pressure. The rest of the big four banks and particularly the regional players were sold off in March.

Bank of Queensland Ltd (ASX: BOQ) and Bendigo and Adelaide Bank Ltd (ASX: BEN) shares are down 8% and 10%, respectively, month to date. This appears to indicate that the market is far more concerned over their prospects than those of CBA.

Which should not be surprising at all given the strength of CBA’s capital position and liquidity.

As I mentioned here, CBA is arguably the safest ASX bank share thanks to its CET1 ratio of 11.4%, liquidity coverage ratio (LCR) of 131%, and net stable funding ratio (NSFR) of 129%. These are all significantly higher than requirements.

All in all, in light of this, it wouldn’t be surprising to see the CBA share price rebound in April if banking crisis concerns ease and investors return to the sector.

The post Why did the CBA share price tumble in March? appeared first on The Motley Fool Australia.

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More reading

• ASX shares are paying out $19 billion in dividends this week. Are you getting a piece?
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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We’re still in March (barely), but we already know that the S&P/ASX 200 Index (ASX: XJO) is most likely heading for an overall loss for the month. The ASX 200 has had a pretty dire month over March, as most investors would be aware.

Despite today’s 0.63% lift for the Index, the ASX 200 is still down a meaningful 1.25% since the end of February. But let’s talk about the Woolworths Group Ltd (ASX: WOW) share price.

Woolworths shares defied the market comprehensively over the month (nearly) just gone. Since the end of February, Woolies shares have risen from $36.92 a share to the $37.88 we are seeing at this point of Friday’s session. That’s a gain worth just over 2.6%, meaning that the Woolworths share price has beaten the broader market by close to 3% over March as it currently stands:

So what happened for Woolworths shares that made this ASX 200 blue chip a safe haven for investors over what was a rather wild month for most shares?

Why has the Woolworths share price smashed the ASX 200 in March?

Well, it’s hard to put a finger on it. There weren’t any major announcements from the supermarket giant over the month.

But we can probably conclude that the half-year earnings report Woolworths delivered back in February probably helped. Investors seemed very impressed with the numbers Woolies put up.

As we went through at the time, these saw the company reveal a 4% rise in sales to $33.17 billion, as well as a 14% surge in net profits after tax (NPAT). To top it off, Woolworths announced that its interim dividend would get a 17.9% boost up to a fully-franked 46 cents per share.

As it stands today, the Woolworths share price is a healthy 3.2% higher than where it was the day these earnings were released. So investors seem to have given this report card a tick of approval. This probably helped hold up the Woolworths share price over the past month.

ASX brokers love Woolies shares right now

Another factor that may have helped keep the Woolworths share price above water is the love it has been receiving from ASX brokers.

Earlier this week, we covered the conviction buy rating that ASX broker Goldman Sachs currently has on Woolies shares. And the $41 share price target that came with it. 

Goldman gave this stamp of approval thanks to “consumer stickiness and loyalty among peers” and a “strong ability to drive market share gains via its omni-channel advantage, as well as pass through any cost inflation to protect its margins”.

So this might have helped boost sentiment for Woolies shares over the past month too. In addition, consider that Woolworths is a consumer staples share.

Consumer staples shares are typically thought of as ‘safer’ in times of market stress, given that their customers tend to keep coming through the doors, regardless of the economic weather.

So it’s probably a combination of these factors that helped the Woolworths share price smash the ASX 200’s returns over March. Let’s see how the company does in April.

The post Why did the Woolworths share price smash the ASX 200 in March? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Rio Tinto Ltd (ASX: RIO) share price is pushing higher on Friday. Its gains come amid news the company’s entered a joint venture to kick start work at one of the world’s largest undeveloped copper deposits.

Canada-listed First Quantum Minerals will acquire a 55% stake in Rio Tinto’s Peru-based La Granja copper project for $105 million. The company has also committed to invest up to $546 million to fund its initial development.

The S&P/ASX 200 Index (ASX: XJO) mining giant bought the project in 2006. Today’s agreement is said to be key to unlocking its progress.

The Rio Tinto share price is $119.47 at the time of writing, 1.88% higher than its previous close.

For comparison, the ASX 200 has risen 0.71% right now.

Let’s take a closer look at the $169 billion Aussie mining company’s latest deal.

Rio Tinto enters $651m copper joint venture

The Rio Tinto share price is outperforming today as the market seemingly takes notice of the potential offered by a major copper project – one a company executive labelled “exciting but complex”.

The high-altitude La Granja project boasts an indicated and inferred mineral resource of 4.32 billion tonnes at 0.51% copper.

Extensive drilling previously completed by Rio Tinto expanded the project’s declared resource and the understanding of its ore body. It also established partnerships with host communities, local and national governments.

The transaction announced today is expected to be finalised in the third quarter of 2023. After that, First Quantum will operate the project through to its feasibility study.

From that point, all expenditures will be applied on a pro-rata basis according to the pair’s respective ownership of the project.

Rio Tinto copper chief executive Bold Baatar commented on the new joint venture, saying:

La Granja is an exciting but complex project that has the potential to be a significant new source of the copper that is needed for the energy transition.

This partnership underscores not only La Granja’s potential to be a significant copper producer, but Peru’s position as one of the world’s most important mining investment destinations.

Developing La Granja would also further strengthen Rio Tinto’s copper portfolio following the acquisition of Turquoise Hill Resources and commencement of underground mining at Oyu Tolgoi in Mongolia.

Rio Tinto share price snapshot

The Rio Tinto share price has performed well in recent months.

The stock has gained 3% since the start of 2023 and is trading flat year-on-year.

Meanwhile, the ASX 200 has also lifted 3% year to date. Though, it’s fallen 4% over the last 12 months.

The post Rio Tinto share price lifts on copper project news appeared first on The Motley Fool Australia.

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• Invested $7,000 in Rio Tinto shares 5 years ago? Here’s how much passive income you’ve earned

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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