This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Cryptocurrencies continued their ascent this morning, as bond yields dropped and investors got more optimistic about the trajectory of interest rates. There has also been an apparent short squeeze this week for several prominent cryptocurrencies.

Over the last 24 hours, the prices of Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), and Dogecoin (CRYPTO: DOGE) had all made significant gains.

The price of Bitcoin traded roughly 6.6% higher and hovered around $20,777 as of 10:26 a.m. ET today. The price of Ethereum traded roughly 13.4% higher, and the price of Dogecoin was up 10.4%.

So what

Cryptocurrencies have been crushed all year long because of the Federal Reserve’s aggressive interest rate hikes, which have led to surging bond yields as well.

But this week, bond yields have receded some, with the yield on the 10-year U.S. Treasury bill coming down from above 4.2 percentage points earlier this week to just above 4 percentage points as of this writing.

That has buoyed stocks and cryptocurrencies, as investors get hopeful that perhaps the bulk of the Fed’s rate hikes will soon be at an end. 

But in other news, there have been reports of a big short squeeze that has driven the recent gains of Bitcoin and Ethereum. CoinDesk reported that major exchanges have seen some of the largest liquidations of short positions since the middle of 2021.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why are Bitcoin, Ethereum, and Dogecoin leaping higher today? appeared first on The Motley Fool Australia.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Bram Berkowitz has positions in Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Bitcoin, and Ethereum. The Motley Fool Australia has recommended Alphabet (A shares) and Alphabet (C shares). The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Fortescue Metals Group Ltd (ASX: FMG) share price is up slightly in morning trade on Thursday.

Fortescue shares are currently trading for $16.16 apiece after touching an intraday high of $16.36 earlier.

Below, we look at what the S&P/ASX 200 Index (ASX: XJO) iron ore miner just reported for the quarter ending 30 September (Q1 FY23).

Fortescue share price lifts on record first quarter operating performance

Investors are bidding up the Fortescue share price after the miner reported a 4% boost in iron ore shipments from the prior comparable period. The 47.5 million tonnes (mt) shipped in Q1 FY23 represent a record for a first quarter.

The company earned an average revenue of US$87 per dry metric tonne (dmt).

Direct costs (C1) were also up, climbing 3% quarter on quarter to US$17.69 per wet metric tonne (wmt). This was due to higher fuel costs and other industry-wide cost pressures.

As at 30 September, Fortescue had a cash balance of US$3.3 billion with a net debt of US$2.8 billion. This figure is post the payment of the FY22 final dividend of US$2.4 billion and capital expenditure of US$653 million.

What else happened during the quarter?

ESG investors may also be helping out the Fortescue share price today after the miner updated the market on its decarbonisation roadmap.

The company plans to invest US$6.2 billion by 2030 to eliminate fossil fuel risks. It forecasts this will save some US$3 billion by 2030. Annual savings are expected to reach US$818 million once the roadmap is fully in place.

Over the quarter Fortescue Future Industries (FFI) also entered a collaboration with Tree Energy Solutions. The partnership is intended to speed up the development of a green hydrogen and green energy import facility in Germany.

Atop this, FFI established a United States Technology Hub and inked a partnership with the US Department of Energy’s National Renewable Energy Laboratory.

What did management say?

Commenting on the results that look to be helping boost the Fortescue share price today, CEO Andrew Forrest said:

We are establishing the building blocks of a new, global renewable energy value chain spanning technology, manufacturing, green energy generation and distribution which will deliver significant returns to our shareholders.

Last month at the United Nations General Assembly, Fortescue announced it would step beyond fossil fuels and lead heavy industry to achieve real zero emissions (Scope 1 and 2) across our iron ore operations by 2030…

Against this backdrop of a strong performance for the first quarter, we are well positioned to meet our guidance, execute on our strategy and ensure all our stakeholders continue to benefit from Fortescue’s success.

What’s next?

Looking ahead, Fortescue offered FY23 guidance of 187-192 mt of iron ore shipments, which includes around 1 mt from Iron Bridge.

The miner expects CI costs for hematite of US$18.00 – US$18.75/wmt, with capital expenditure of US$2.7 – US$3.1 billion.

The cap ex guidance excludes FFI, which Fortescue expects will come to US$500 – US$600 million of operating expenditure and US$230 million of capital expenditure.

The miner is assuming an average exchange rate for the financial year of 70 Aussie cents to the US dollar.

Fortescue share price snapshot

Atop some healthy dividends the miner paid out, the Fortescue share price is up around 16% over the past 12 months. That compares to an 8% loss posted by the ASX 200.

The post Fortescue share price lifts on record first quarter operating performance appeared first on The Motley Fool Australia.

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More reading

• Have ASX 200 high-yield dividend shares been a blessing or a curse in 2022?
• Why ‘other stocks appeal more’ than Fortescue shares: expert
• Why is the Fortescue share price surging today?
• Why I’m not worried about Fortescue’s $9.6 billion decarbonisation plans smashing my dividends
• ASX dividend shares ‘likely to remain attractive’ despite rising bank deposit rates: expert

Motley Fool contributor Bernd Struben 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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Australia and New Zealand Banking Group Ltd (ASX: ANZ) has just reported its FY22 result for the 12 months to 30 September 2022. Shareholders also learned about the ANZ dividend announcement.

Many investors may be interested in what the bank decided to do with its dividend.

With many banks valued on a relatively low price-to-earnings (P/E) ratio – the valuation multiple of their earnings – it means that many banks have high dividend yields.

ANZ dividend

The large S&P/ASX 200 Index (ASX: XJO) bank share decided to declare a final dividend of 74 cents per share. This represented a 2.8% increase compared to the final dividend from FY21 of 72 cents.

That brought the full-year dividend to $1.46 per share, which was an increase of 3% year over year.

The dividend payout ratio of its cash profit was 65% for the final dividend. The payout ratio was also 65% for the full year.

ANZ’s board said:

The board considers that a final dividend of 74 cents per share is appropriate and is consistent with its stated target dividend payout ratio of between 60% and 65% (cash continuing, ex large/notable basis).

This is in line with statements made during the recent equity raising and applies to new ANZ shares issued as part of the process.

With an annual dividend of $1.46 per share, that means the ANZ share price currently offers a grossed-up dividend yield of 8.5%.

Outlook

The board of ANZ doesn’t provide guidance about its expected dividend payment.

However, considering it’s targeting a payout ratio of its earnings, we can see whether ANZ is expecting to grow profit, and this could imply dividend growth.

ANZ CEO Shayne Elliot said:

There is uncertainty ahead, however we have the business in good shape to withstand volatility. We also have a highly engaged workforce with a high-performance culture and I’m confident in our ability to continue to deliver for customers and shareholders.

He also referred to RBA data that shows total household balance sheets are “the best they have been for 15 years”.

But Elliot said the next six months “will be testing”, particularly for first-time homeowners who are only starting to build up their equity as well as those with less stable employment.

The net interest margin (NIM) improvement looks promising for ANZ. In the first half of FY22 its NIM – which shows how much profit the bank makes from lending – was 1.58%. It grew to 1.68% in the second half of FY22. The exit margin for the month of September 2022 was 1.8%, implying that lending profitability can rise in FY23.

It’s possible, perhaps likely, that the Reserve Bank of Australia (RBA) interest rate could keep rising until inflation is under control, which may be able to help ANZ’s lending margins further. There is also an “increasing mix of variable rate home loan flows”, which have a higher NIM than the fixed rate loans over the past couple of years.

Foolish takeaway

ANZ is paying investors another large dividend in this result. If it can grow profit in FY23, then investors may well see a larger ANZ dividend in the new financial year.

The post Everything you need to know about the latest ANZ dividend appeared first on The Motley Fool Australia.

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• Why is the ANZ share price sinking today?
• ANZ share price on watch after reporting $6.5b cash earnings for FY22
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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 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 Materials Index (ASX: XMJ) is climbing 1.90% today, but one ASX lithium share is soaring far higher.

The Koba Resources Ltd (ASX: KOB) share price is exploding 136% today to 26 cents.

Let’s take a look at why this ASX lithium share is doing so well today.

What’s going on?

Koba Resources advised the market it has staked mining claims covering 145km2 at the company’s new Whitlock Lithium Project. This means Koba has the right to extract lithium from this area of land.

The site, located in southern Manitoba Canada, is a “high quality lithium pegmatite project”, Koba said.

The project is located immediately on strike from the Tanco mine, which has lithium reserves of 7.3 Mt at 2.76% lithium oxide. Also nearby, are lithium resources including 10.2 Mt at 1.4% Li2O2, 3.6Mt at 1.28% Li2O3 and 1.1Mt at 1.51% Li2O4.

Koba said extensive pegmatites have been mapped at the Whitlock project. Field work will start at the project in future days.

Commenting on the news, managing director and CEO Ben Vallerine said:

We are excited to have staked the Whitlock Lithium Project adjacent to the world-class Tanco Lithium-Caesium-Tantalum pegmatite mine – Canada’s only operating lithium mine.

The addition of a lithium project to our portfolio of high-grade cobalt assets is a logical progression as we continue to focus on battery metals to support the EV revolution and the electrification of the global economy.

Koba is also exploring cobalt in the United States.

Koba share price snapshot

The Koba share price has lifted 30% year to date, while it has soared 100% in the past month.

Koba listed on the ASX in May.

Koba has a market capitalisation of about $16.9 million based on the current share price.

The post Guess which ASX lithium share is soaring 136% on big news appeared first on The Motley Fool Australia.

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More reading

• Why are Bitcoin, Ethereum, and Dogecoin leaping higher today?
• Fortescue share price lifts on record first quarter operating performance
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Motley Fool contributor Monica O’Shea 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 Vulcan Energy Resources Ltd (ASX: VUL) share price is up 0.69% amid the company posting its quarterly activities and cash flow reports for the September 2022 quarter this morning.

Shares of the ASX lithium stock are currently trading for $7.32 apiece. Earlier, they hit a high of $7.38 and a low of $7.18.

Let’s go over the highlights of these reports from the lithium developer.

What did Vulcan Energy Report?

• Net cash used in operating activities: €5.13 million ($7.97 million)
• Net cash used in investing activities: €12.52 million ($19.45 million)
• Cash and cash equivalents down 9.81% from the previous quarter to €158.20 million ($245.79 million)
• Estimated quarters of funding available: 15

One of Vulcan’s highlights for the September quarter was the beginning of on-site works at its sorption demo plant in Landau, Germany. This site will be important for training its staff in a pre-commercial setting.

Another achievement was producing “the highest grade lithium hydroxide samples that [Vulcan] has yielded to date”. These were produced through its phase 1 definitive feasibility study that should be completed by the end of Q1 FY23.

Meanwhile, work also commenced at its Insheim and Landau-Süd licence areas to create an integrated lithium and geothermal energy project in the future.

What else happened in the September quarter?

A binding agreement was made with Enel Green Power for exploring geothermal lithium in Italy.

The company’s first sustainability report was released covering the financial year of 2022. The report focused on climate-related financial disclosures (TCFD) and Vulcan’s approach to sustainability practices.

Vulcan appointed a new deputy CEO, Cris Moreno, who has worked on lithium hydroxide and battery cathode plants in Europe.

What did management say?

Vulcan’s managing director and CEO Francis Wedin said:

With winter approaching, and as Germany and Europe grapple with an energy crisis, Vulcan is making a positive impact by generating baseload, renewable power from our Insheim geothermal renewable energy plant. We are focused on delivering a significant contribution to renewable energy supply in Europe, by developing multiple large-scale renewable heat and power projects across the Upper Rhine Valley Brine Field.

As global supply chains continue to be challenging, Vulcan is leveraging our strong cash position to be strategic and proactive in procuring long lead items and key equipment. Our drilling company, Vercana, has secured long lead items required for the first drilling project and orders have been placed for all key equipment for the electrolysis demonstration plant, LiLy.

Vulcan Energy share price snapshot

The Vulcan Energy share price is down around 29% year to date. That’s more than the S&P/ASX 200 Index (ASX: XJO), which has lost 8% over the same period.

The company’s market capitalisation is around $1.04 billion.

The post ‘Well positioned’: Why the Vulcan share price is climbing today appeared first on The Motley Fool Australia.

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More reading

• 3 ASX 300 shares off to the races on Wednesday
• Why Life360, Novonix, Pilbara Minerals, and Vulcan shares are storming higher today
• 4 ASX lithium shares surging more than 10% today
• Vulcan share price rockets 12% on lithium update
• Which ASX All Ords shares avoided a sell-off during the last recession?

Motley Fool contributor Matthew Farley 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 Australian Clinical Labs Ltd (ASX: ACL) share price is crashing deep into the red on Thursday.

In morning trade, the pathology services provider’s shares are down 12% to $3.12.

Why is the Australian Clinical Labs share price sinking?

The Australian Clinical Labs share price has been sold off today after the company revealed that it was the victim of a cyber incident all the way back in February!

According to the release, the company Medlab Pathology business, which was acquired in December 2021, has experienced a “notifiable cyber incident” involving personal information of some of its patients and staff.

Australian Clinical Labs has conducted a forensic analysis of the affected information and has determined that personal information of approximately 223,000 individuals has been affected. This group of individuals is largely confined to New South Wales and Queensland.

The company has released a summary of the records breached of most concern. They are:

• ~17,539 individual medical and health records associated with a pathology test
• ~28,286 credit card numbers and individuals’ names (Of these records ~15,724 have expired and ~3,375 have a CVV code)
• ~128,608 Medicare numbers and an individual’s name

Australian Clinical Labs advised that the Office of the Australian Information Commissioner (OAIC) has been notified and both the OAIC and the Australian Cyber Security Centre (ACSC) are being kept up to date.

The company also highlights that there is no evidence of misuse of any of the information or any ransom demands, to date. But as we have seen with Medibank Private Ltd (ASX: MPL), that could change quickly.

As mentioned above, the company revealed that it was actually first aware of unauthorised third-party access to its IT system all the way back in February but did not inform patients or the share market. Even worse, this customer data was found on the dark web in June but once again the company chose not to notify patients or investors.

This was because it has apparently taken its forensic analysts and experts four months “to determine the individuals and the nature of their information involved.”

Australian Clinical Labs’ CEO, Melinda McGrath, said:

On behalf of Medlab, we apologise sincerely and deeply regret that this incident occurred. We recognise the concern and inconvenience this incident may cause those who have used Medlab’s services and have taken steps to identify individuals affected. We are in the process of providing tailored notifications to the individuals involved. We want to assure all individuals involved that ACL is committed to providing every reasonable support to them. We will continue to work with the relevant authorities.

The post Another ASX All Ords share is plunging 12% on cyberattack news appeared first on The Motley Fool Australia.

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More reading

• Why is Ethereum Classic surging today?
• Core Lithium share price crushed on Tesla deal collapse
• Lynas share price jumps despite 44% revenue fall
• If the government has this right, the BHP share price could come under some serious pressure
• Why is the ANZ share price sinking 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 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

As the world’s second-largest cryptocurrency, Ethereum (CRYPTO: ETH) generally dictates the way that many Ethereum-related tokens perform on any given day. Such is the case today, with Ethereum, Ethereum Classic (CRYPTO: ETC), and Lido Staked Ether (CRYPTO: STETH) all surging within a relatively tight band. As of 11:45 a.m. ET on Wednesday, these three tokens had risen 13.3%, 10.3%, and 13.2%, respectively, over the past 24 hours.  

These moves come on the heels of some rather impressive liquidation data for Ethereum. Over the past 24 hours, according to the website Coinglass, Ethereum liquidations surged to more than $575 million. These liquidations were skewed by more than 5 to 1 toward short trades, suggesting leveraged short-sellers are getting hit at a staggering pace. In fact, this pace of short liquidations is the fastest since July of 2021, providing retail investors with a potential short squeeze to jump on today.  

As more bullish sentiment builds in the market around Ethereum and other megacap tokens, staking interest on the Ethereum network could surge. For Lido Staked Ether, this is an obvious catalyst. That’s because it’s the token that represents the equivalent of a receipt for holders of ETH tokens staked on Lido’s liquid staking platform.   

For Ethereum Classic, this network, which is actually a fork of the original Ethereum blockchain, has seen a surge in interest from crypto miners who have switched over to mining ETC to make up for lost revenue previously mining Ether. Accordingly, this blockchain is distinct from Ethereum itself, but appears to be rallying based more on broadly bullish macro conditions today.

So what

The moves Ethereum Classic and Lido Staked Ether have made today generally follow the high correlation of these tokens to Ethereum. As tokens that are generally viewed as proxies on Ethereum itself, Ethereum Classic and Lido Staked Ether have both seen a surge in interest as short positions are replaced by more risk-on trades in today’s market.

However, it’s important to consider the catalysts that drove this short-liquidation surge in Ethereum today. It appears that expectations that central banks could slow interest-rate hikes have driven most of today’s bullish shift. The Bank of Canada announced a slower-than-expected rate hike of 50 basis points (0.5%) today, which hinted at the potential of an eventual central bank pivot. That’s an obvious bullish catalyst for crypto investors, who have seen leverage come under pressure as rates rise and capital seeks a safe haven in fixed-income assets.

Now what

The crypto market’s surge today, led by Ethereum, Ethereum Classic, and Lido Staked Ether, is one that many crypto investors have been longing for. It’s been a tough year, to say the least, for most crypto investors, with the overall market still down roughly two-thirds from its peak in late-2021. 

Accordingly, whether the rally we’ve seen over the past few days can be sustained is the real question. For now, there’s a lot to like about the momentum we’re seeing with the upside among these three tokens.

But we’ve also seen downside volatility overwhelm bulls this year more often than not. Accordingly, investors looking to time the bottom might want to wait for more-conclusive data before jumping in with two feet.      

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why is Ethereum Classic surging today? appeared first on The Motley Fool Australia.

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More reading

• Core Lithium share price crushed on Tesla deal collapse
• Lynas share price jumps despite 44% revenue fall
• If the government has this right, the BHP share price could come under some serious pressure
• Why is the ANZ share price sinking today?
• Could ASX 200 lithium shares bask in sky-high lithium prices into the future? Here’s what Argo says

Chris MacDonald has positions in Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Ethereum. The Motley Fool Australia owns and has recommended Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.            

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Core Lithium Ltd (ASX: CXO) share price is having a difficult morning.

In early trade, the lithium miner’s shares were down 10% to $1.31.

The Core Lithium share price has since recovered a touch but remains down 7% to $1.35.

Why is the Core Lithium share price being crushed?

Investors have been selling down this lithium miner’s shares on Thursday after it released an update on its offtake agreement with Tesla.

As you might have guessed from the Core Lithium share price performance, it wasn’t a positive update.

According to the release, the agreement to supply the electric vehicle giant with up to 110,000 dry metric tonnes of lithium spodumene concentrate from the Finnis Lithium Project is off.

That’s because the date for concluding the term sheet was 26 October 2022 and passed without the agreement being completed.

Tesla’s CEO, Elon Musk, has previously complained about how lithium prices were at ridiculously high levels, so it is possible the auto giant was playing hardball with negotiations.

What now?

Core Lithium doesn’t appear concerned by the failure to complete the deal.

It notes that the recent official opening of the Finniss Lithium Mine has positioned the company to take advantage of strong global demand and constrained lithium supply.

The company highlights the recent sale of 15,000 tonnes of direct shipping ore (DSO) as proof of this. This DSO sale was tendered on a CIF basis to several pre-screened participants active in the lithium-ion battery supply chain and received a strong price.

Furthermore, agreements are in place with Ganfeng and Yahua that bring total concentrate sales under offtake contracts to about 80% of the Finniss Lithium Project production over the first four years of operations.

Core Lithium’s CEO, Gareth Manderson, commented:

I want to thank Tesla for the time taken to negotiate with Core and look forward to maintaining an open and ongoing dialogue. The recent DSO sale, predicted commencement of lithium concentrate sales in H1 2023 and an increasing lithium price environment indicate that Core Lithium is well positioned to capitalise on the high demand and current shortage of available battery grade lithium spodumene concentrate.

The post Core Lithium share price crushed on Tesla deal collapse appeared first on The Motley Fool Australia.

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• Here are the 3 most heavily traded ASX 200 shares on Monday

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.

from The Motley Fool Australia https://www.fool.com.au/2022/10/27/core-lithium-share-price-crushed-on-tesla-deal-collapse/

The Lynas Rare Earths Ltd (ASX: LYC) share price is climbing 5.19% in early trade this morning. This comes after the company announced its quarterly activities report for Q1 FY23 before market open.

Shares of the company are currently trading for $8.31 each. That marks a strong recovery after they slumped to $7.72 soon after open.

Let’s go over the report’s highlights.

What did Lynas Rare Earths report?

• Quarterly sales revenue down 44.38% from Q4 FY22 to $163.8 million
• Sales receipts down 33.21% to $234.4 million
• Total rare earth oxide (REO) production down 4.10% to 3,500 REOt
• Neodymium-praseodymium oxide (NdPr) production down 33.81% to 1,045 REOt

Sales of Lynas’s production were affected in September by a “catastrophic” water shortage that reduced its overall production volumes.

Furthermore, the average selling price of its REO production fell drastically in the reported period, down to $49.3/kg from $79.2/kg in the previous quarter, or a 37.75% discount.

The average selling price of its REO was impacted by Lynas fulfilling several large orders of Cerium due to its lower selling price than NdPr, and due to high volumes.

Lynas notes that overall it expects strong demand for its neodymium and praseodymium from its customers in the foreseeable future.

What else happened in Q1 FY23?

Lynas announced a $500 million capacity expansion for its Mt Weld flotation plant located in Western Australia.

This was partially funded by a US$9 million contribution from its senior lender, JARE (Japan Australia Rare Earths BV), via a subscription of ordinary shares in the company.

Meanwhile, the company continued to make progress with the construction of its Kalgoorlie Rare Earths Processing facility. An upgrade to the plant’s facilities was announced as it will incorporate an industry-first carbonate refining process, which was pre-funded by the federal government’s modern manufacturing initiative.

With this new initiative in mind, the project will cost the company roughly 15% more than the original $500 million budget estimate.

What did management say?

Lynas Rare Earths CEO Amanda Lacaze made the following comments:

We continued to face significant operational challenges including a complete outage of water supply in Malaysia. A catastrophic equipment failure experienced by the local water supplier to our Malaysian facility resulted in approximately 16 days of lost production during the quarter.

Ore mining commenced at Mt Weld during the quarter as part of Mining Campaign 4-1 and blended ores from this campaign were introduced into the process plant. Mt Weld and Kalgoorlie integration activities also commenced in the quarter and we continued to use a combination of both commercial and charter shipping to transport concentrate product to Malaysia.

Lynas continues to work with the U.S. Government on the follow-on phase for the commercial Heavy Rare Earths separation facility and the site for the combined Heavy Rare Earths and Light Rare Earths facility is in the final stages of selection.

What’s next?

The report noted that future REO pricing largely hinges on the economic recovery in China. It also notes that demand for materials has suffered from “weak demand” in the recent past.

The company will continue to roll out upgrades and expansion efforts at its Kalgoorlie and Mt Weld sites.

Lynas share price snapshot

The Lynas share price is down around 20% year to date. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is down 8% over the same period.

The company’s market capitalisation is around $7.15 billion.

The post Lynas share price jumps despite 44% revenue fall appeared first on The Motley Fool Australia.

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Motley Fool contributor Matthew Farley 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 BHP Group Ltd (ASX: BHP) share price, as you’d expect, is significantly impacted by the price of iron ore.

The industrial metal is responsible for roughly half of BHP’s revenue, bringing in approximately as much as its copper and coal segments combined.

So, it should come as no surprise that the BHP share price rocketed to new record highs in July 2021, shortly after the iron ore price was trading north of US$215 per tonne.

BHP shares then retraced right alongside the iron ore price for the rest of the year as the metal fell to US$92 per tonne.

To round this off, iron ore charged back above US$161 by early April 2022, which saw the BHP share price leap to another near record of $53.17.

Today, iron ore is fetching US$94 per tonne. And BHP shares are trading for $38.54. (Though we should note that the S&P/ASX 200 Index (ASX: XJO) mining giant paid out almost $13 billion in final dividends in September.)

So, having established the link between the iron ore price and the performance of the BHP share price, what exactly is the government forecasting?

Why government forecasts could see the BHP share price under pressure

If you’ve had a gander over this week’s Federal government budget, you may have noticed the iron ore price forecasts.

Government analysts predict the iron ore price will slide to US$55 per tonne (Free on Board (FOB) Australia) by the end of Q1 2023. That’s a big drop from today’s prices and could put some serious pressure on the BHP share price.

But not everyone agrees with the bearish assessment for iron ore spelled out in the budget.

In its Economic Insights report, Commonwealth Bank of Australia (ASX: CBA) said, “We think that the Government’s forecasts for Australia’s key mining and energy commodities in the coming years are broadly too conservative.”

The report goes on to state:

The Budget’s iron ore price forecast is lower than our outlook through the outlook period. The differences though lessen in later years. The difference reflects our view that prices will only gradually fall to $US60/t-$US65/t (FOB Australia) by late 2026/27 following a volatile year ahead.

Spot prices have come under pressure as China’s property downturn weighs on demand. Policy in China remains the key driver of prices, particularly China’s COVID-zero policy.

We broadly expect iron ore prices to bottom in Q1 2023 as China’s COVID-zero policy continues to weigh on demand. A shift away from China’s COVID-zero by the end of March 2023 should see iron ore prices lift in the following quarters.

If CBA has this one right, the BHP share price should follow iron ore higher in the latter quarters of 2023.

BHP share price snapshot

Atop the miner’s healthy dividends, the BHP share price has marched 48% higher over the past five years. That handily outpaces the 16% gains posted by the ASX 200 over this same period.

The post If the government has this right, the BHP share price could come under some serious pressure appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben 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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