Mount Gibson Iron (MGX)

Mount Gibson Iron is raised to “hold" from “reduce" at Morningstar with asset quality “well below industry majors due to higher cash costs, product discounts and relatively short mine life".

Group output is in excess of 8 million tonnes of iron ore a year, but will decline to about 4 million tonnes from fiscal 2017, it said.

“The balance sheet is strong with approximately $300 million net cash at June 30, 2013."

“However, below industry average margins and short life mean Mount Gibson lacks a moat and will struggle to build one in an environment of high asset prices and capital costs," Morningstar said.