WA’s FIFO ban a blow for resources giants

Original article by Brad Thompson, Peter Ker
The Australian Financial Review – Page: 22 : 31-Mar-20

Workers from interstate account for about 3,000 of the 45,000 people in Western Australia’s resources sector who are on fly-in, fly-out arrangements. FIFO workers from interstate are currently exempt from a 14-day coronavirus quarantine period, but the Chamber of Minerals & Energy of WA has told its members that the state government is likely to remove this exemption within days. The Queensland and South Australian governments are also tipped to scrap the exemption for FIFO workers who cross state borders.

CORPORATES
THE CHAMBER OF MINERALS AND ENERGY OF WESTERN AUSTRALIA INCORPORATED, BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, WOODSIDE PETROLEUM LIMITED – ASX WPL, NEWCREST MINING LIMITED – ASX NCM, CHEVRON CORPORATION

Miners told to keep digging as rivals halt

Original article by Peter Ker
The Australian Financial Review – Page: 23 : 25-Mar-20

Rio Tinto and South32 are among the Australian-listed mining companies whose operations will be affected by coronavirus lockdowns in South Africa and the Canadian province of Quebec. Production at mines in Australia is continuing at present, although New Hope Corporation’s CEO Shane Stephan says it is too soon to know if the virus will force local mines to close. He adds that it would be naive to suggest that there will be no impact. BHP CEO Mike Henry says senior government officials have indicated that they are keen for the resources industry to keep operating, given its contribution to the economy.

CORPORATES
NEW HOPE CORPORATION LIMITED – ASX NHC, BHP GROUP LIMITED – ASX BHP

Newcrest axes FIFO route into PNG’s Lihir mine

Original article by Peter Ker
The Australian Financial Review – Page: 23 : 20-Mar-20

Newcrest Mining has responded to the coronavirus pandemic by suspending the use of Australian fly-in, fly-out workers at the Lihir gold mine in Papua New Guinea. The move will take effect within days, but Newcrest will continue to use FIFO workers at its mines in Australia. The company has noted that it primarily uses local workers at Lihir, rather than employees on FIFO arrangements. Australia’s gold, iron ore, copper, oil and gas sectors are particularly reliant on FIFO workers.

CORPORATES
NEWCREST MINING LIMITED – ASX NCM

Vale setback a boon for Australian iron ore producers

Original article by Peter Ker
The Australian Financial Review – Page: 23 : 20-Mar-20

Vale’s iron ore distribution hub in Malaysia will be disrupted by the government’s efforts to contain the coronavirus. Vale expects work at the hub to be suspended until the end of March, which could reduce its iron ore shipments for the first quarter by an additional one per cent. The Brazilian miner had previously advised that its export volumes would be seven per cent lower than previously. The pandemic has affected mining operations worldwide, although it has yet to have any impact on Australia’s iron ore sector.

CORPORATES
VALE SA

Virus could stall progress on Rio Tinto’s Mongolia project

Original article by Peter Ker
The Australian Financial Review – Page: 27 : 17-Mar-20

Rio Tinto has advised that work on the multi-billion dollar underground expansion of its Oyu Tolgoi copper mine in Mongolia is being slowed as a consequence of efforts to limit the spread of the coronavirus. Rio had previously reported in February that copper deliveries from the mine to buyers in China were being delayed due to border control measures aimed at tackling the spread of the virus. The underground expansion of the Oyu Tolgoi mine has been the subject of ongoing delays.

CORPORATES
RIO TINTO LIMITED – ASX RIO

BHP loses epic tax battle

Original article by Nick Evans
The Australian – Page: 20 : 12-Mar-20

The High Court has ruled in the Australian Taxation Office’s favour in a long-running tax dispute with BHP over its marketing hub in Singapore. BHP will have to pay an additional $US87m ($125m) in tax for the income years 2006 to 2018 after the court ruled that its Australian and British arms are ‘associates’ for tax purposes. A spokesman has noted that the resources group has paid some $71bn in taxes and royalties in Australia over the last decade.

CORPORATES
BHP GROUP LIMITED – ASX BHP, AUSTRALIAN TAXATION OFFICE

Tax-slugged miners are bankrolling us all

Original article by Geoff Chambers
The Australian – Page: 2 : 10-Mar-20

A report produced by KPMG on behalf of the Minerals Council of Australia highlights the importance of the mining sector to government revenue. It shows that corporate taxes and royalties have accounted for 39- 49 per cent of the sector’s earnings since 2011-12. MCA CEO Tania Constable says that on average, the minerals sector has paid more than $20bn in taxes and royalties annually over this period. She adds that the sector is helping to finance infrastructure projects and the salaries of public sector workers such as teachers and nurses.

CORPORATES
MINERALS COUNCIL OF AUSTRALIA, KPMG AUSTRALIA PTY LTD

Chinese back Rio ore mine in Africa

Original article by Nick Evans
The Australian – Page: 24 : 6-Mar-20

Media reports have suggested that China’s State-owned Assets Supervision & Administration Commission will approve an investment in the Simandou iron ore deposit in Guinea. SASAC oversees investments made by Chinese government-owned enterprises such as Chinalco, which is one of Rio Tinto’s partners in the deposit. The massive cost of developing the Simandou deposit – which has been estimated at around $US20bn ($30.2bn) – has contributed to the project being stalled for more than two decades.

CORPORATES
RIO TINTO LIMITED – ASX RIO, CHINA. STATE-OWNED ASSETS SUPERVISION AND ADMINISTRATION COMMISSION, ALUMINIUM CORPORATION OF CHINA LIMITED

Iron ore mining giants in virus vigil over fly-in, fly-out workforce

Original article by Brad Thompson
The Australian Financial Review – Page: 22 : 5-Mar-20

Fortescue Metals Group has asked all employees who have travelled overseas to remain at home for 14 days before returning to work. One employee was quarantined at the Christmas Creek iron ore mine after reporting flu-like symptoms following a trip to Bali, and Fortescue has confirmed that they have tested negative for the virus. BHP and Rio Tinto are also actively taking measures to protect their workforces from the coronavirus at their iron ore mines.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO

Fool’s gold: $2bn hedge hole

Original article by Nick Evans
The Australian – Page: 17 & 20 : 5-Mar-20

The gold price is currently trading at around $2,450 an ounce in Australian dollar terms. However, the nation’s leading gold producers have locked in forward sales of more than three million ounces at prices well below this level. Newcrest Mining stands to incur the biggest loss from gold hedging, having locked in sales of more than 658,000 ounces from the Telfer mine at just $1,875 an ounce over the next three years.

CORPORATES
NEWCREST MINING LIMITED – ASX NCM