Iron ore weakness to continue into 2025 and beyond, says Fitch Solutions’ BMI
Looking beyond 2024-2025, BMI analysts maintained their view that iron ore prices will likely follow a multi-year downtrend.
The Globe & Mail reports Ivanhoe Mines, building Mongolia’s Oyu Tolgoi, will scrap a controversial “poison pill” shareholder provision that clears the way for Rio Tinto, which already owns 49% of the Vancouver-based company, to do a complete takeover.
According to calculations by Credit Suisse, reported by the Globe & Mail the poison pill plan would have required $73 billion of funding from shareholders through a rights offer if triggered, including $38 billion from Rio:
“Certainly Rio would like to own it, they would like to control it – it is their biggest copper project. They see it is a great asset and they are willing to back it,” said analyst Nik Stanojevic at brokerage Brewin Dolphin in London.
“They want to buy it and they will think of a sensible way of getting hold of more of it.”
“This is very good news in terms of Ivanhoe being taken over by Rio,” Ray Goldie, a Toronto-based analyst at Salman Partners Inc., said in a telephone interview. “It makes it a lot easier for Rio or anyone else.”
In October the Mongolian government said it was rethinking a 2009 deal that gave Ivanhoe Mines and Rio Tinto a 66% stake in Oyu Tolgoi and that it wanted half of the $6 billion gold and copper project. Ivanhoe shares plunged on the news, but the firm took a tough stance and after some desperate negotiations Mongolia backed off.
On Wednesday Ivanhoe Mines (TSE:IVN) closed at $19.31, bringing its market value to some $14.3 billion. The counter is up 6.7% since the start of the year. In August Vancouver-based Friedland told a group of investors that Ivanhoe is worth at least $30 billion.
