Monday, July 26, 2021

"Record Profits and Blockbuster Payouts: Here Come the Miners"

 From Bloomberg via Yahoo Finance, July 26:

The world’s biggest mining companies are about to start revealing how much cash they’re churning out from this year’s commodity boom. Look out for record profits followed by eye-watering dividend payouts.

The top-five western diversified miners may have earned a combined $85 billion for the first half of the year, according to analyst estimates, more than double the level from a year ago. Rio Tinto Group, the first to report on Wednesday, is expected to announce $22 billion of profit for the six months, on a par with its total for all of 2020.

The mining sector has been one of the biggest beneficiaries from the world’s efforts to emerge from the pandemic. The trillions of dollars poured into recovery packages have ignited demand for commodities like steel, iron ore and aluminum, driving prices sharply higher and sending inflation pressures rippling through the global economy.

And while previous rallies lured the industry into ambitious investment plans to build and expand mines, many producers this time appear content to return their profit windfalls to investors. The two biggest -- Rio and larger rival BHP Group -- have already been funneling record returns to shareholders.

Each of the group of five majors -- which also includes Glencore Plc, Anglo American Plc and Vale SA -- are expected to report their biggest-ever earnings for the six months through June, according to average analyst estimates compiled by Bloomberg. Rio could pay out 60% of its underlying earnings, according to some analyst estimates.....


Our Go-To for all things mining (and many, many things other commodities)  is the FT's natural resources editor, Neil Hume: