Company Reports

Deterra's fiscal 2026 adjusted net profit after tax of AUD 152 million rose 14% on last year driven by higher iron ore volumes at BHP's Mining Area C, or MAC. This more than offset a lower realized iron ore price. It will pay an AUD 10.8 cents per share fully franked final dividend in September.

Deterra Royalties aims to grow into a diversified royalty company with multiple cash flows. The acquisition of Trident Royalties is likely the first of additional royalty and/or streaming purchases.

The iron ore price continues to trade in a narrow range, with spot of around USD 100 per metric ton flat on a quarter ago as Chinese imports remain strong despite falling steel production. The copper price is also broadly unchanged, trading around USD 6 per pound, near historical highs.

The iron ore price is broadly flat compared with last quarter. While China's steel production in the first quarter of 2026 is down 5% year on year to about 250 million metric tons, its iron ore imports are up 11% to around 315 million metric tons.

Deterra Royalties aims to grow into a diversified royalty company with multiple cash flows. The acquisition of Trident Royalties is likely the first of additional royalty and/or streaming purchases.

Deterra's first-half adjusted NPAT of AUD 76 million is up 20% year over year, driven by higher iron ore volumes and prices at BHP's Mining Area C. It declared a fully franked dividend of AUD 12.4 cents per share, up 38% year over year, likely why shares have risen 4% since the announcement.

Deterra Royalties aims to grow into a diversified royalty company with multiple cash flows. The acquisition of Trident Royalties is likely the first of additional royalty and/or streaming purchases.

The iron ore price is up on last quarter as China's imports remain strong despite its steel production falling below 1 billion metric tons in 2025 for the first time since 2019. Its anti-involution campaign is reducing overcapacity, mainly via the closure of smaller, less efficient steelmakers.

The iron ore price has shrugged off re-escalation of the trade war between the United States and China, though copper is down moderately in response. Both are up about 10% since the last quarterly update of our assumed commodity prices.

Deterra Royalties aims to grow into a diversified royalty company with multiple cash flows. The acquisition of Trident Royalties is likely the first of additional royalty and/or streaming purchases.

Deterra's fiscal 2025 NPAT of AUD 160 million, or AUD 0.30 per share, is similar to last year. Higher volumes and an AUD 20 million capacity payment from BHP's Mining Area C, along with gold offtake revenue, offset lower iron ore prices and higher costs. Shares were little changed on the day.

Deterra Royalties aims to grow into a diversified royalty company with multiple cash flows. The acquisition of Trident Royalties is likely the first of additional royalty and/or streaming purchases.

Shares of our iron ore, base metals, coal, and mineral sands miners have risen on last quarter after the shock of April 2, 2025 tariffs. With China driving demand for most commodities, investors appear to have concluded that tariffs wont materially weaken growth and commodity demand.

Demand from China has been the main driver of rising commodity prices in the past two decades. More recently, gold is close to historical highs on safe-haven demand. However, driven by weak China steel end-user demand and slower global growth, most other commodity prices have fallen.

Gold is higher in the March quarter as worries over tariffs affecting economic growth see a flight to safety. Despite likely slower global growth, copper is up as investors try to get ahead of potential tariffs on US copper imports. Iron ore is flat, while metallurgical and thermal coal are down.

Shares of our nongold mining coverage are materially lower on last quarter, led by base metals and coal miners, with iron ore miners also lower. Near-term commodity demand could be weaker due to higher US tariffs potentially leading to slower economic growth and recession.

Deterra Royalties’ first-half fiscal 2025 result was in line with our expectations, with revenue down by 6% to AUD 112 million as a 22% decline in iron ore prices offset 13% growth in volumes at BHP’s Mining Area C. Despite the acquisition of Trident, more than 90% of revenue is from MAC. Underlying net profit after tax declined 13% to AUD 69 million, or AUD 0.13 per share. Deterra will pay a fully franked interim dividend of AUD 0.09 per share in March for a roughly 70% payout ratio.

Deterra Royalties aims to grow into a diversified royalty company with multiple cash flows. The acquisition of Trident Royalties is likely the first of additional royalty and/or streaming purchases.

Iron ore and most commodity prices rose in the December quarter on China’s increased efforts to support its economy and tottering residential property sector. However, prices are generally elevated versus the past and cost curve support.

Iron ore prices increased last quarter on optimism about greater China stimulus. This has also driven most other commodity prices higher. Rising gold prices are supported by exchange-traded fund flows from Western investors and central bank purchases.