RBC sees FY22 operational risks to increase for Aussie miners

Mincor Resources NL

19/04/2022 05:58

** Analysts at RBC Capital Markets expect high commodity
prices and subdued capital spend to lead Aussie bulk, base and
diversified miners to a strong free cash flow for the quarter
    ** However, RBC says cost inflation in 2021 will continue to
affect miners and expect operational risk to increase for FY22
    ** RBC says 1Q could also see wet weather conditions impact
key Australian operations
    ** brokerage see larger-cap miners faring better with its
top picks being South32  S32.AX , Mincor Resources  MCR.AX ,
Sandfire Resources  SFR.AX , BHP  BHP.AX , and retains its
rating of underperform on Fortescue Metals  FMG.AX  and OZ
Minerals  OZL.AX  
    ** RBC expects a 9% increase in South32's copper production
in the third quarter of FY22; sees recent wet weather to impact
operations at Groote Eylandt Company and Illawarra Metallurgical
Coal 
    ** Brokerage sees Fortescue strong shipments to continue in
the Q3 of FY22; costs expected to remain elevated at its Eliwana
operations in Western Australia  
    ** RBC hikes PT for South32 to A$5.5 from A$5.4; raises PT
for Fortescue to A$16 from A$15 
    ** RBC sees flattish production for IGO  IGO.AX  and WSA for
three months ended March 31; expects WSA to produce 4.1 thousand
tonnes of nickel in concentrate
    ** "The key marker for the quarter will be the performance
of MATSA for SFR Resources ...We estimate 11kt of copper, 15kt
of zinc with high" - RBC 
    ** RBC sees RIO and BHP to report weak iron ore shipments
for their quarters; expects BHP's Q3 met coal sales volume to
pick up  urn:newsml:reuters.com:*:nL3N2WH0GE urn:newsml:reuters.com:*:nL3N2WH02Z

    

 (Reporting by Navya Mittal in Bengaluru)
 ((navya.mittal@thomsonreuters.com))