B08 Metal Ore Mining

Pressure on lower grade iron ore miners as discount widens

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Original article by Tess Ingram, James Thomson
The Australian Financial Review – Page: 17 : 16-Jun-16

The benchmark spot price of iron ore has shed 23 per cent since the start of May 2016. Meanwhile, the discount on lower-grade iron ore has increased from 9.8 per cent in early January to 21 per cent in mid-June, after peaking at 26 per cent in late May. Peter O’Connor of Shaw & Partners says the widening price discount is having a big impact on producers of lower-grade iron ore.

CORPORATES
SHAW AND PARTNERS LIMITED, FORTESCUE METALS GROUP LIMITED – ASX FMG, MORNINGSTAR PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Lessons learnt, says Citic’s chief as sole focus now on Sino Iron future

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Original article by Tess Ingram
The Australian Financial Review – Page: 28 : 14-Jun-16

The cost of developing the Sino Iron magnetite project in Western Australia is believed to have blown out to around $US12bn ($A16.2bn). However. Citic Pacific Mining CEO Chen Zeng has declined to comment on the cost of the project, which Citic bought for $US415m in 2006. The Sino Iron project has been affected by a long-running legal dispute, while the iron ore price has fallen significantly since shipments commenced in late 2013.

CORPORATES
SINO IRON PTY LTD, CITIC PACIFIC MINING MANAGEMENT PTY LTD, MINERALOGY PTY LTD, METALLURGICAL CORPORATION OF CHINA LIMITED, CITIGROUP PTY LTD, PATERSONS SECURITIES LIMITED

Mining capex slump ‘only half finished’

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Original article by Mark Mulligan
The Australian Financial Review – Page: 31 : 14-Jun-16

National Australia Bank notes that capital expenditure in the mining sector has fallen to around 4.5 per cent of GDP, compared with eight per cent at the height of the resources boom. The bank expects capex to reach a low of just 1.5 per cent of GDP by 2018. NAB also notes that the downturn in employment in the mining sector has been slower than anticipated, although this is expected to gather pace in coming years with the loss of a net 50,000 by 2019.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIAN BUREAU OF STATISTICS

O’Keefe ready to ride iron ore’s upswing

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Original article by Brian Robins
The Sydney Morning Herald – Page: 23 : 13-Jun-16

Champion Iron chairman Michael O’Keefe hopes the iron ore group can replicate the success he had at coal producer Riversdale Mining, which Rio Tinto bought for $A4bn during the resources boom. Champion Iron was created via the merger of Australian-listed Mamba Minerals and Canada’s Champion Mines. The group paid $C10.5m for the Bloom Lake iron ore project, which boasts 66 per cent iron. In contrast, most Australian iron ore has an iron content of 62 per cent or less. O’Keefe has targeted late 2017 for the first shipment from Bloom Lake.

CORPORATES
CHAMPION IRON LIMITED – ASX CIA, RIO TINTO LIMITED – ASX RIO, RIVERSDALE MINING LIMITED, CLIFFS NATURAL RESOURCES INCORPORATED, IRON ORE COMPANY OF CANADA

Demerging Alcoa slams ‘opportunistic’ Alumina

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Original article by Barry FitzGerald
The Australian – Page: 22 : 10-Jun-16

Alcoa’s vice-president of investor relations, Matt Garth, has criticised Alumina over its attempt to use the US group’s proposed demerger to renegotiate the Alcoa World Alumina & Chemicals joint venture. Garth told investors and analysts in Sydney that Alumina is being "emotional and opportunistic", and rejected the Australian-listed company’s claim that it must agree to the Alcoa demerger under the terms of the AWAC agreement. He added that Alcoa is confident that a court will rule in its favour.

CORPORATES
ALUMINA LIMITED – ASX AWC, ALCOA INCORPORATED, ALCOA WORLDWIDE ALUMINA AND CHEMICALS, MORGAN STANLEY AUSTRALIA LIMITED, ALLAN GRAY AUSTRALIA PTY LTD

Gold’s M&A to scale down as sales dry up

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Original article by Tess Ingram
The Australian Financial Review – Page: 20 : 9-Jun-16

Evolution Mining and Northern Star Resources are among the mid-tier gold producers that have benefited from the asset sales programs of larger global rivals in recent years. Evolution chairman Jake Klein cautions that future opportunities for acquisitions in the sector will become limited, with fewer large projects likely to be put up for sale. He says the focus is likely to shift to exploration and development, and he has called for greater collaboration between mid-tier and small gold miners.

CORPORATES
EVOLUTION MINING LIMITED – ASX EVN, NORTHERN STAR RESOURCES LIMITED – ASX NST, OCEANAGOLD CORPORATION – ASX OGC, BARRICK GOLD CORPORATION, NEWMONT MINING CORPORATION, ASSOCIATION OF MINING AND EXPLORATION COMPANIES, INDEPENDENCE GROUP NL – ASX IGO, SIRIUS RESOURCES NL

No relief in sight for iron ore bulls

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Original article by Stephen Cauchi
The Australian Financial Review – Page: 28 : 3-Jun-16

Morgan Stanley notes that global iron ore production will rise by 41 million tonnes in the second half of 2016, followed by an additional 78 million tonnes in 2017. The looming increase in global supply does not bode well for the price of the steel input, which has fallen by more than 30 per cent since late April 2016. BHP Billiton, Rio Tinto and Vale are among the iron ore producers that will increase their output in coming years, as new projects or mine expansions reach full production capacity.

CORPORATES
MORGAN STANLEY AUSTRALIA LIMITED, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, VALE SA, ROY HILL IRON ORE PTY LTD, SAMARCO MINERACAO SA

M&A won’t solve BHP’s growth questions

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Original article by James Thomson
The Australian Financial Review – Page: 29 : 31-May-16

Citi analyst Clarke Wilkins notes that BHP Billiton has performed poorly in terms of mergers and acquisitions in recent years, and its high level of debt is likely to rule out acquisitions in the next several years. Wilkins adds that there is a dearth of suitable acquisitions at present, particularly in the copper and oil sectors, and he suggests that the resources giant could instead consider asset sales. He identifies BHP’s petroleum division as a potential candidate for asset sales.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, CITIGROUP PTY LTD, RIO TINTO LIMITED – ASX RIO, POTASH CORPORATION OF SASKATCHEWAN INCORPORATED, GLENCORE PLC, SOUTH32 LIMITED – ASX S32

Aussie miner accused of menacing US giant Alcoa on demerger plan

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Original article by John Kehoe
The Australian Financial Review – Page: 8 : 30-May-16

US aluminium giant Alcoa has launched legal action against Australian-listed Alumina, its partner in the Alcoa World Alumina & Chemicals joint venture. The dispute centres on Alcoa’s proposal to demerge its upstream and downstream assets. The former will hold Alcoa’s 60 per cent stake in AWAC if the deal proceeds. Alcoa’s lawsuit alleges that the joint venture agreement does give Alumina the right to block the demerger.

CORPORATES
ALUMINA LIMITED – ASX AWC, ALCOA INCORPORATED, ALCOA WORLDWIDE ALUMINA AND CHEMICALS

BHP tunes up Olympic Dam but timing slightly off

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Original article by Simon Evans
The Australian Financial Review – Page: 17 & 22 : 27-May-16

BHP Billiton will hire an additional 120 workers at its Olympic Dam copper and uranium mine in South Australia. The resources group intends to expand underground mining at Olympic Dam, with plans to increase copper production from 200,000 tonnes in 2015-16 to 230,000 tonnes in 2020-21. BHP eventually aims to lift annual production to 280,000 tonnes. However, the long-term goal of 450,000 tonnes per annum will depend on the use of heap leaching technology, which is currently being trialled.

CORPORATES
BHP BILLITON LIMITED – ASX BHP