B08 Metal Ore Mining

Arrium’s future hangs in balance

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Original article by Paul Garvey, Michael Owen
The Australian – Page: 19 & 20 : 5-Apr-16

South Australian Treasurer Tom Koutsantonis has urged the nation’s banks to provide assistance to debt-laden steel maker and iron producer Arrium. Concern about the future of the Whyalla steelworks has deepened after Arrium’s lenders rejected a bailout plan from Blackstone-owned GSO Capital Partners. The lenders, who rank as unsecured creditors, would have received just $A0.55 in the dollar if the $US927m ($A1.2bn) recapitalisation proposal had been approved.

CORPORATES
ARRIUM LIMITED – ASX ARI, GSO CAPITAL PARTNERS LP, THE BLACKSTONE GROUP LP, SOUTH AUSTRALIA. DEPT OF TREASURY AND FINANCE, CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION OF AUSTRALIA, ARGAND PARTNERS, CERBERUS CAPITAL MANAGEMENT LP, KKR AND COMPANY LP, AUSTRALIA. DEPT OF INDUSTRY, INNOVATION AND SCIENCE

Fortescue keeps contract in-house to cuts costs

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Original article by Paul Garvey
The Australian – Page: 20 : 5-Apr-16

Downer EDI’s contract to provide mining services at Fortescue Metals Group’s Christmas Creek iron ore mine will not be renewed when it expires in September 2016. Fortescue has already dispensed with mining contractors at its other iron ore mines, and CEO Nev Power says the move will result in further cost reductions. Downer EDI has previously estimated that the contract was worth $A720m, but says its financial results for fiscal 2016 are unlikely to be affected.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, DOWNER EDI LIMITED – ASX DOW, MACMAHON HOLDINGS LIMITED – ASX MAH

Rinehart’s Hancock Prospecting bullish on iron ore prices

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Original article by Perry Williams
The Australian Financial Review – Page: 13 & 20 : 4-Apr-16

Hancock Prospecting is upbeat about the outlook for the iron ore price in the near-term. Executive director Tad Watroba is optimistic that it will remain within the range of $U55 to $U60 per tonne for the remainder of 2016. He notes that about 25 million tonnes of the Roy Hill iron ore project’s output of 55 million tonnes will be shipped to Chinese buyers. The project’s first shipment to China will shortly arrive at the port of Caofeidian.

CORPORATES
HANCOCK PROSPECTING PTY LTD, ROY HILL HOLDINGS PTY LTD, BOAO FORUM FOR ASIA, RIO TINTO LIMITED – ASX RIO, HOPE DOWNS IRON ORE PTY LTD, POSCO, MARUBENI CORPORATION, CHINA STEEL CORPORATION, CREDIT SUISSE (AUSTRALIA) LIMITED, METAL BULLETIN LIMITED, CHINA IRON AND STEEL INDUSTRY ASSOCIATION

Short sellers look to big miners

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Original article by Peter Ker, Thomas Hounslow
The Australian Financial Review – Page: 27 : 1-Apr-16

The recent rise in short positions in Rio Tinto, BHP Billiton, Glencore and Anglo American suggests that many investors do not believe that a rally in commodity prices will last. For Rio Tinto, the percentage of its Australian shares sold short in mid-February 2016 was the highest since late December 2012. According to Macquarie Securities, the prices of metal and bulk commodities will continue to be under pressure because of over-capacity.

CORPORATES
RIO TINTO LIMITED – ASX RIO, BHP BILLITON LIMITED – ASX BHP, GLENCORE PLC, ANGLO AMERICAN PLC, MACQUARIE SECURITIES PTY LTD

Roy Hill iron bound for China

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Original article by Glenda Korporaal
The Australian – Page: 20 : 31-Mar-16

Chinese steelmaker Shougang International will shortly receive its inaugural shipment of iron ore from the Roy Hill project in Western Australia. The first shipment to China is scheduled to arrive at the port of Caofeidian in early April 2016. The Gina Rinehart-backed Roy Hill commenced exports in late 2015, and it is eventually slated to produce 55 million tonnes per annum.

CORPORATES
ROY HILL HOLDINGS PTY LTD, SHOUGANG GROUP, POSCO, ASIAN INFRASTRUCTURE INVESTMENT BANK, HANCOCK PROSPECTING PTY LTD, MARUBENI CORPORATION, CHINA STEEL CORPORATION

Junior miners ripe for picking, says Lanstead

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Original article by Tess Ingram
The Australian Financial Review – Page: 27 : 30-Mar-16

British fund manager Lanstead Investors aims to invest about $A300m in Australian-listed stocks over the next several years. Its portfolio currently comprises about $A50m worth of Australian shares, and co-founder Greg Kofford is bullish about local resources groups. He believes that smaller resources companies in particular offer good value at present. Lanstead director Andrew Sparke notes that lack of access to capital has forced many smaller miners to shelve quality projects.

CORPORATES
LANSTEAD INVESTORS PTY LTD, WESTERN MINING NETWORK LIMITED – ASX WMN, CARBINE TUNGSTEN LIMITED – ASX CNQ, MUSTANG RESOURCES LIMITED – ASX MUS, LITHIUM AUSTRALIA NL – ASX LIT, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO

Qube benefits from Brockman’s maverick move on Pilbara

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Original article by Jenny Wiggins
The Australian Financial Review – Page: 17 : 30-Mar-16

Australian-listed iron ore group Brockman Mining still aims to gain access to the rail network of Fortescue Metals Group in the Pilbara region of Western Australia. Brockman has secured an agreement for logistics group Qube Holdings to transport iron ore from its Maverick project by road to Port Hedland, but large-scale production will require transport via rail. Brockman estimates that the project’s operating costs will be around $US35 per tonne.

CORPORATES
BROCKMAN MINING LIMITED – ASX BCK, QUBE HOLDINGS LIMITED – ASX QUB, FORTESCUE METALS GROUP LIMITED – ASX FMG, COURT OF APPEAL (WESTERN AUSTRALIA)

Rio’s long game in copper hunt

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Original article by Amanda Saunders
The Australian Financial Review – Page: 59-60 : 24-Mar-16

Expectations of a looming global undersupply of copper has prompted renewed interest in the red metal among the world’s biggest mining companies. Jean-Sebastien Jacques, the head of Rio Tinto’s copper division and the group’s incoming CEO, forecasts that global copper supply will go into deficit in 2018-19. He says Rio would consider buying any so-called tier one copper assets that are put on the market, but notes that even tier two and tier three copper assets are expensive now.

CORPORATES
RIO TINTO LIMITED – ASX RIO, BHP BILLITON LIMITED – ASX BHP, UBS HOLDINGS PTY LTD, ANTOFAGASTA PLC, SUMITOMO CORPORATION, INTERNATIONAL COPPER STUDY GROUP

Miners feel pinch of dollar, oil switch

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Original article by Paul Garvey
The Australian – Page: 20 : 23-Mar-16

The Australian dollar has risen by about 10 per cent so far in 2016. This has offset the benefits of the rebound in the prices of key resources commodities, which are typically priced in US dollars. Mining companies have also been hit by increased fuel costs due to the rally in the crude oil price. Tom Price of Morgan Stanley says the rise in the value of the currency and the crude oil price may prompt more resources groups to reduce production or mothball mines.

CORPORATES
MORGAN STANLEY AUSTRALIA LIMITED, GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG

Ore glut ‘vandalism’ over

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Original article by Glenda Korporaal, Barry FitzGerald
The Australian – Page: 19 & 20 : 23-Mar-16

Rio Tinto’s iron ore production in 2015 was 20 million tonnes lower than the group had forecast, while BHP Billiton’s output was in line with the previous year. They had had ramped up production in recent years, attracting criticism from Fortescue Metals Group chairman Andrew Forrest. He believes that the period of oversupply has now ended, but says it resulted in job losses in Australia and over-production by Chinese steelmakers. Forrest has also suggested that the recent resignation of Rio Tinto CEO Sam Walsh may have been due to a change to its iron ore strategy.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, RIO TINTO LIMITED – ASX RIO, BHP BILLITON LIMITED – ASX BHP, VALE SA, ROY HILL IRON ORE PTY LTD, UBS HOLDINGS PTY LTD, BOAO FORUM FOR ASIA