US markets falter, Aug. 7-11

U.S. President Donald’s Trump threats last week to unleash “fire and fury” against the North Korean regime if it endangered the U.S. or its allies sent the Dow Jones Industrial Average down 1.06% to 21,858.32 and the S&P 500 Index down 1.43% to 2,441.32. The Philadelphia Gold & Silver Index rose 2.50% to 84.09, in step with a higher gold price, which ended the week up US$30.03 to US$1,288.70 per ounce.

Shares of Vale slipped US29¢ to US$9.01. The company confirmed at the end of July that it could not obtain a licence to operate at the Samarco iron ore mine in Brazil before year-end. The operation, a joint-venture between Vale and BHP Billiton in Minas Gerais state, was halted in November 2015 after a fatal tailings dam burst. The disaster left 19 people dead and sent sludge downstream through remote mountain valleys, reaching the Atlantic Ocean, 600 km away. Reuters reported on July 31 that BHP Billiton denied a report in a Brazilian newspaper that it had agreed to sell its stake in the Samarco mine to Vale.

Mosaic’s shares fell US$2.24 to US$20.34 apiece. The company reported net income of US$97 million in the second quarter, compared to a US$10-million net loss in the second quarter of 2016. Earnings per diluted share were US28¢. Net sales in the quarter of 2017 were US$1.8 billion, up from US$1.7 billion last year, with higher sales volumes offsetting lower realized prices for phosphates. Operating earnings were US$95 million, up from US$12 million a year ago, driven by higher phosphate and potash sales volumes, higher potash and international distribution segment margins. At the end of June the company had cash and equivalents of US$661 million and long-term debt of US$3.8 billion.

Rio Tinto saw a US$2.22 decline in its share price to US$44.61. The company reported net earnings of US$3.31 billion during the first half, up 93% from the US$1.71 billion in net earnings for the same period last year. Rio generated operating cash flow of US$6.3 billion and returned US$3 billion in cash to shareholders. The company also cut its net debt by US$2 billion to US$7.6 billion.