B06 Coal Mining

Local investors get behind BHP demerger

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Original article by Amanda Saunders
The Australian Financial Review – Page: 21 : 19-Mar-15

BHP Billiton will incur total costs of $US738m ($A966m) in demerging non-core assets into the South32 entity. Tim Schroeders of Pengana Capital says the costs are higher than anticipated, while Argo Investments’ Jason Beddow says investors are likely to seek information from BHP on the likely productivity gains arising from the demerger. Both fund managers say that as yet there are no compelling reasons to vote against the deal on 6 May 2015

CORPORATES
BHP BILLITON LIMITED – ASX BHP, SOUTH32 LIMITED, PENGANA CAPITAL LIMITED, ARGO INVESTMENTS LIMITED – ASX ARG, ABERDEEN ASSET MANAGEMENT LIMITED, BERNSTEIN AND ASSOCIATES, GLENCORE PLC, X2 RESOURCES PARTNERS LP, WARBURG PINCUS AND COMPANY

‘Big duck’ South32 not just waiting

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Original article by Amanda Saunders
The Australian Financial Review – Page: 1 & 16 : 18-Mar-15

BHP Billiton has revealed that its South32 spin-off will have net debt of $US675m ($A882m). South32 will have a dividend payout ratio of 40 per cent, rather than adopting the progressive dividend policy of BHP. South32 CEO Graham Kerr has downplayed suggestions that the group will attract interest from potential suitors due to its low level of debt. BHP shareholders will vote on the proposed demerger on 6 May 2015

CORPORATES
BHP BILLITON LIMITED – ASX BHP, SOUTH32 LIMITED, ABERDEEN ASSET MANAGEMENT LIMITED, RIO TINTO LIMITED – ASX RIO, GLENCORE PLC, X2 RESOURCES PARTNERS LP, UBS HOLDINGS PTY LTD

BHP wants carbon rules clarity

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Original article by Amanda Saunders
The Australian Financial Review – Page: 15 : 6-Mar-15

BHP Billiton intends to spend more on low-emission technologies, but the group wants more clarity on climate change policy. Fiona Wild, BHP’s head of climate change, says the challenge is to make carbon capture and storage technologies financially viable. Such initiatives are important, but fossil fuels will retain their central place in energy generation

CORPORATES
BHP BILLITON LIMITED – ASX BHP

Glencore takes aim at iron ore giants

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Original article by Amanda Saunders
The Australian Financial Review – Page: 28 : 5-Mar-15

Glencore will reduce its coal production in Australia by 15 million tonnes in 2015. CEO Ivan Glasenberg says the decision to reduce output by around 15 per cent was made because the group does not want to be seen to have forced coal prices lower due to oversupply. Glasenberg has previously criticised BHP Billiton and Rio Tinto for expanding their iron ore production at a time prices have fallen sharply

CORPORATES
GLENCORE PLC, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, VALE SA

BHP defies price crashes

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Original article by Amanda Saunders
The Australian Financial Review – Page: 1 & 8 : 25-Feb-15

BHP Billiton has posted 2014-15 interim underlying earnings of $US5.4bn ($A6.9bn, which is 31 per cent lower than previously. The group’s earnings were hit by the sharp decline in the price of iron ore and crude oil. Meanwhile, BHP intends to reduce its capital expenditure by $US3.8bn in 2014-15 and 2015-16. Shareholders will receive an interim dividend of $A0.62 per share, and CEO Andrew Mackenzie says that maintaining its dividend payout ratio is one of the group’s priorities

CORPORATES
BHP BILLITON LIMITED – ASX BHP, NIKKO ASSET MANAGEMENT GROUP, RIO TINTO LIMITED – ASX RIO, ATLAS IRON LIMITED – ASX AGO, BC IRON LIMITED – ASX BCI, ABERDEEN ASSET MANAGEMENT LIMITED, SOUTH32 LIMITED

BHP under pressure to lift returns

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Original article by Amanda Saunders
The Australian Financial Review – Page: 18 : 23-Feb-15

BHP Billiton has not reduced its dividend since 1988, and analysts generally agree that a reduced payout is unlikely when the resources giant releases its 2014-15 interim results on 24 February 2015. Paul Young of Deutsche Bank does not expect BHP to increase its dividend for at least another two years, arguing that it should focus on growth rather than improving returns to shareholders. Paul McTaggart of Credit Suisse also says a share buyback is unlikely in the next several years

CORPORATES
BHP BILLITON LIMITED – ASX BHP, DEUTSCHE BANK AG, CREDIT SUISSE (AUSTRALIA) LIMITED, SOUTH32 LIMITED

Coal prices ‘unlikely’ to recover in 2015

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Original article by Stephen Cauchi
The Australian Financial Review – Page: 23 : 20-Feb-15

ANZ Bank analysts Mark Pervan and Rajneet Kaur are bearish about the long-term outlook for the price of coal. ANZ has downgraded its forecast for coking coal to $US115 per tonne at the end of 2015 and $US130/per tonne at the end of 2018. It is currently trading at around $US117/tonne. Australia exported $A22.9bn worth of coking coal in 2013

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

South32 to ‘walk before it can run’

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Original article by James Chessell
The Australian Financial Review – Page: 13 & 18 : 16-Feb-15

Analysts estimate that South32 will have a market capitalisation of between $A11bn and $A15bn when it lists on the Australian sharemarket in mid-2015. CEO Graham Kerr says that maximising the group’s existing projects and reducing costs will be its main focus at first, rather than acquisitions. However, Paul Young of Deutsche Bank believes that the BHP Billiton spin-off will have to pursue acquisitions, as its scope for organic growth is limited

CORPORATES
SOUTH32 LIMITED, BHP BILLITON LIMITED – ASX BHP, DEUTSCHE BANK AG, RIO TINTO LIMITED – ASX RIO, MACQUARIE GROUP LIMITED – ASX MQG, GLENCORE PLC

Rio Tinto leads $10b in payouts

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Original article by Amanda Saunders
The Australian Financial Review – Page: 1 & 12 : 13-Feb-15

Rio Tinto’s underlying earning for calendar 2014 were nine per cent lower than previously at $US9.3bn, although the result was better than analysts had expected. Rio will repurchase some $US2bn ($A2.6bn) worth of its shares, while a 12 per cent increase in its full-year dividend means a total of $US6bn ($A7.8bn) will be returned to shareholders. The resources group’s net debt has been reduced to $A12.5bn, compared with $US22bn in mid-2013

CORPORATES
RIO TINTO LIMITED – ASX RIO, GLENCORE PLC, DEUTSCHE BANK AG, UBS HOLDINGS PTY LTD, AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED – ASX AFI, BHP BILLITON LIMITED – ASX BHP, TELSTRA CORPORATION LIMITED – ASX TLS, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, TRANSURBAN GROUP LIMITED – ASX TCL, COLONIAL FIRST STATE GLOBAL ASSET MANAGEMENT

‘Acquisitions the only way’ for South32

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Original article by Amanda Saunders
The Australian Financial Review – Page: 21 : 4-Feb-15

BHP Billiton’s proposed South32 spin-off is slated to debut on the Australian sharemarket by mid-2015. Deutsche Bank’s Paul Young has a valuation of $US13bn ($A16.7bn) on South32, and cautions that the group will have to pursue acquisitions as its scope for organic growth will be limited. He expects South32 to shun BHP’s progressive dividends policy in favour of a payout ratio of 30-40 per cent

CORPORATES
BHP BILLITON LIMITED – ASX BHP, SOUTH32 LIMITED, DEUTSCHE BANK AG, SOUTH AFRICA COAL