B08 Metal Ore Mining

No relief in sight for iron ore bulls

roymorgansocial Leave a comment

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

roymorgansocial Leave a comment

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

roymorgansocial Leave a comment

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

roymorgansocial Leave a comment

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

Miners plead for no new tax slug in NSW budget

roymorgansocial Leave a comment

Original article by Annabel Hepworth
The Australian – Page: 19 & 22 : 26-May-16

The New South Wales Minerals Council has warned the State Government that imposing additional taxes on mining companies in the June 2016 Budget will deter investment and increase investor uncertainty. The Council’s pre-Budget submission has also urged Treasurer Gladys Berejiklian to provide more funding for the "Resources for Regions" infrastructure program.

CORPORATES
NEW SOUTH WALES MINERALS COUNCIL, NEW SOUTH WALES. THE TREASURY, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, SHENHUA WATERMARK COAL PTY LTD

Stockpiles of iron ore drive prices lower

roymorgansocial Leave a comment

Original article by Matt Chambers, Barry FitzGerald
The Australian – Page: 19 & 28 : 25-May-16

New data shows that iron ore stockpiles at Chinese ports have risen to 100.45 million tonnes, which is the highest level in 14 months. This could put further downward pressure on the benchmark price of iron ore, which has retreated from recent highs. Macquarie Group now expects the iron ore price to average about $US50 per tonne in 2017, compared with its previous forecast of $US45.

CORPORATES
MACQUARIE GROUP LIMITED – ASX MQG, METAL BULLETIN LIMITED, ATLAS IRON LIMITED – ASX AGO, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, VALE SA, BLUESCOPE STEEL LIMITED – ASX BSL, ARRIUM LIMITED – ASX ARI, RESERVE BANK OF AUSTRALIA

Arrium and its steelworks to go on block in late July

roymorgansocial Leave a comment

Original article by Simon Evans
The Australian Financial Review – Page: 8 : 24-May-16

KordaMentha has indicated that a number of Australian and offshore groups have expressed interest in buying the assets of Arrium. KordaMentha, which was appointed as administrator of the failed steel producer and iron ore miner in mid-April 2016, will commence the formal sale process in July, with expectations that it will be completed by the end of the year.

CORPORATES
ARRIUM LIMITED – ASX ARI, KORDA MENTHA AND COLLEAGUES PTY LTD, MOLY-COP, ARGAND PARTNERS LLC, CERBERUS CAPITAL MANAGEMENT LP, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, GRANT THORNTON AUSTRALIA

Cost focus puts BHP on track to raise dividend

roymorgansocial Leave a comment

Original article by Tess Ingram
The Australian Financial Review – Page: 18 : 18-May-16

Credit Suisse has upgraded its underlying earnings forecast for BHP Billiton in 2015-16 by 3.5 per cent to $A12bn, in response to the resources giant’s revised production costs for commodities such as iron ore and coal. Credit Suisse also suggests that BHP could lift its 2015-16 dividend by 10.8 per cent to $A0.25 per share. The firm has lifted its share price target for BHP stock from $A20 to $A21.5.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, CREDIT SUISSE (AUSTRALIA) LIMITED, UBS HOLDINGS PTY LTD

PM urged to tread carefully on steel

roymorgansocial Leave a comment

Original article by Phillip Coorey, John Kehoe
The Australian Financial Review – Page: 4 : 13-May-16

The Minerals Council of Australia (MCA) wants Prime Minister Malcolm Turnbull to proceed cautiously when dealing with the problem of the overproduction of steel in China. Turnbull said he spoke about the issue with US President Barack Obama on 12 May 2016. The Chinese Government is under pressure globally to prevent steel makers from flooding the market with their products. MCA CEO Brendan Pearson said Turnbull should also pay attention to the interests of Australian mining companies engaged in the production of iron ore and metallurgical coal used in steel production in China.

CORPORATES
MINERALS COUNCIL OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, WORLD TRADE ORGANIZATION, US STEEL CORPORATION, ALLEGHENY TECHNOLOGIES INCORPORATED, EUROPEAN UNION CHAMBER OF COMMERCE IN CHINA, CHINA. MINISTRY OF FOREIGN AFFAIRS

BHP plan to unlock $70bn hits right note

roymorgansocial Leave a comment

Original article by Barry FitzGerald
The Australian – Page: 22 : 12-May-16

BHP Billiton’s base value is in line with its market capitalisation of $A98bn. CEO Andrew Mackenzie has told a mining conference in the US that the resources giant could increase its base value by $A70bn via a combination of its existing portfolio of assets and productivity improvements. He says this growth trajectory can be achieved even if there is no significant upturn in commodity prices. BHP shares closed $A0.72 higher at $A18.55 on 11 May 2016.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, UBS HOLDINGS PTY LTD