What’s Priced In? Sensitivity of the Major Iron Ore Miners to Higher Prices
The iron ore price has remained resilient at around USD 55 per tonne, higher than many anticipated. While we still hold to our long-term target of USD 30 per tonne, it is useful to provide a sensitivity analysis as to future earnings, price/earnings multiples, and price/fair value ratios at different iron ore price levels. Investors can then clearly see what iron ore price the market is factoring in perpetuity at any particular share price for Australia’s three major iron ore producers.The foll...
Fortescue Metals Group is an iron ore producer. As of June 30 2016, Co.'s operations had four mine sites in the Pilbara. The Chichester Hub, which includes the Cloudbreak and Christmas Creek mines, is located in the Chichester Ranges and the Solomon Hub, in the Hamersley Ranges, includes the Firetail and Kings Valley mines. Co. owns and operates an integrated supply chain including its Herb Elliott Port in Port Hedland and a heavy haul railway with over 620km of track. As of June 30 2016, Co.'s total hematite ore proved and probable reserves were 2.17 billion tonnes. Also, as of June 30 2016, Co.'s total magnetite ore proved and probable reserves were 705.0 million tonnes.
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