Mineral Resources placed on watchlist by shareholder
Superannuation fund HESTA has placed the Perth-based mining services firm on watchlist over governance concerns.
Norsk Hydro has backed out of a $345-million deal to buy Rio Tinto’s (ASX, LON:RIO) aluminum plant in Iceland amid increasing uncertainty in the market and opposition from European regulators.
The Norwegian firm, one of the world’s top producers of aluminum and alumina, said securing competition approval had taken “longer than anticipated” and after considering “alternative timelines, outcomes and developments” it had decided to withdraw its merger filing.
Prices for alumina, the key material used to make aluminum, have risen 60 percent this year.
Prices for alumina, the key material used to make aluminum, have risen 60 percent this year, hitting a record $650 a tonne in May after authorities in Brazil forced a partial shutdown of Norsk Hydro’s alumina refinery — the world’s biggest — and Rusal, one of the world’s largest suppliers of the commodity, was hit by crippling US sanctions.
Shortly after, the market faced further supply cuts as China intensified its environmental crackdown in the country and three Australian refineries part owned by Alcoa were hit by strikes.
“We estimate that the ongoing suspension of Norsk Hydro’s Alunorte and now the strike at Alcoa’s refineries in Western Australia could be pushing the global alumina market towards a 10 per cent deficit,” Edward Sterck, analyst at BMO Capital Markets, said in a recent report. “Alumina is currently trading at above $600, well above our forecast of $400 for 2019, with the potential to trade higher,” he added.
Rio didn’t say in the statement issued whether is keeping ISAL plant or will try finding another buyer, tightness in the market may make it revaluate the asset’s future.
The company has yet to complete its $500 million sale of the Aluminum Dunkerque smelter in France.
