B08 Metal Ore Mining

ACCC on alert as Fortescue, Vale get cosy

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Original article by Matt Chambers, Paul Garvey
The Australian – Page: 19 & 27 : 9-Mar-16

The Australian Competition & Consumer Commission is among the regulators that are likely to scrutinise a proposed deal between Fortescue Metals Group and Vale. The Brazilian group would acquire 5-15 per cent of Fortescue’s shares on-market, while the two groups would establish a blending joint venture to export $US4bn worth of iron ore to China. Christopher LaFemina of Jefferies does not see much advantage for Vale from the deal unless the long-term plan is for it to acquire Fortescue.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, VALE SA, JEFFERIES AND COMPANY, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, CITIGROUP PTY LTD, WESTERN AUSTRALIA. DEPT OF THE PREMIER AND CABINET

Soaring BHP still has room to run

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Original article by Amanda Saunders
The Australian Financial Review – Page: 17 : 8-Mar-16

A rebound in the iron ore price prompted renewed investor support for BHP Billiton, Rio Tinto and Fortescue Metals Group on 7 March 2016. BHP shares closed 4.98 per cent higher at $A18.55, compared with $A15.57 one week earlier. Shaw & Partners and UBS are the most bullish about the outlook for BHP, with 12-month share price targets of $A27 and $A22 respectively. In contrast, JP Morgan has a share price target of just $A13.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, SHAW AND PARTNERS LIMITED, UBS HOLDINGS PTY LTD, JP MORGAN AUSTRALIA LIMITED, DEUTSCHE BANK AG, GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD, MACQUARIE BANK LIMITED – ASX MBL, CREDIT SUISSE (AUSTRALIA) LIMITED, CITIGROUP PTY LTD, CLSA AUSTRALIA PTY LTD, BANK OF AMERICA AUSTRALIA LIMITED, MERRILL LYNCH (AUSTRALIA) PTY LTD, CLARKSONS PLATOU, ROYAL BANK OF CANADA, BARCLAYS BANK PLC, JEFFERIES AND COMPANY, STANDARD BANK LONDON LIMITED, SBG SECURITIES, MORGAN STANLEY AND COMPANY INCORPORATED, SAMARCO MINERACAO SA, VALE SA

Iron ore leads commodities bounce as high-cost producers exit

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Original article by Barry FitzGerald
The Australian – Page: 32 : 8-Mar-16

The iron ore price has risen by 41 per cent since late December 2015, reaching a high of $US52.40 per tonne in early March 2016. The price of the steel input has averaged $US51.60 per tonne over the last 12 months. The rebound is partly attributable to the withdrawal of iron ore miners with high production costs from the market. According to Rio Tinto, supply of high-cost iron ore fell by around 130 million tonnes in 2015, while just 75 million tonnes of new supply will enter the market in 2016.

CORPORATES
RIO TINTO LIMITED – ASX RIO, BHP BILLITON LIMITED – ASX BHP, MACQUARIE GROUP LIMITED – ASX MQG, THE STEEL INDEX LIMITED

2000-plus mining jobs cut in 2016; more to go

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Original article by Tess Ingram
The Australian Financial Review – Page: 13 & 20 : 7-Mar-16

It is estimated that about 2,330 workers in the Australian mining industry have been retrenched so far in 2016. South32 plans to sack about 770 employees by mid-2016, while 330 employees of Consolidated Minerals have been affected by its decision to put production at its manganese mine in Western Australia on hold. Iron ore producers such as Grange Resources and Mount Gibson Iron have also shed staff in 2016, while media reports have suggested that Rio Tinto could retrench between 500 and 700 employees in Western Australia.

CORPORATES
SOUTH32 LIMITED – ASX S32, CONSOLIDATED MINERALS LIMITED, GRANGE RESOURCES LIMITED – ASX GRR, MOUNT GIBSON IRON LIMITED – ASX MGX, RIO TINTO LIMITED – ASX RIO, BC IRON LIMITED – ASX BCI, FORTESCUE METALS GROUP LIMITED – ASX FMG, BHP BILLITON LIMITED – ASX BHP, QUEENSLAND NICKEL PTY LTD, PIT CREW MANAGEMENT CONSULTING SERVICES PTY LTD, WESTERN AUSTRALIA. DEPT OF MINES AND PETROLEUM

BHP surges on dam compo deal

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Original article by Barry FitzGerald
The Australian – Page: 19 & 20 : 4-Mar-16

Shares in BHP Billiton closed 3.1 per cent higher at $A17.25 on 3 March 2016. The stock rallied after its Samarco iron ore joint venture secured an agreement with the Brazilian Government and two state governments regarding compensation and remediation work following the November 2015 tailings dam disaster. The deal could potentially allow the Samarco joint venture with Vale to resume production in 2017.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, VALE SA, SAMARCO MINERACAO SA, SHAW AND PARTNERS LIMITED

700 jobs to go as Rio strips its costs

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Original article by Matt Chambers
The Australian – Page: 20 : 3-Mar-16

Rio Tinto has declined to comment on media reports which suggested that it plans to shed between 500 and 700 workers at its iron ore mines in Western Australia. The job cuts are part of its goal to reduce global costs by $US2bn ($A2.6bn) over the next two years. Rio Tinto previously reduced its Western Australian iron ore headcount by 800 in 2015, and its costs have been slashed by $US6.2bn over the last three years.

CORPORATES
RIO TINTO LIMITED – ASX RIO

BlackRock’s Evy Hambro predicts more mines to close

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Original article by Peter Ker
The Australian Financial Review – Page: 15 : 2-Mar-16

BlackRock’s Evy Hambro expects bulk commodities to remain oversupplied, although he forecasts an improvement in the supply-demand balance for some base metals. Hambro also forecasts that more mining companies will discontinue production at some mines during 2016, and he says the downturn in the crude oil price is unsustainable and it will begin to rebound. BlackRock is a major shareholder of leading mining groups such as BHP Billiton, Rio Tinto and Glencore.

CORPORATES
BLACKROCK INCORPORATED, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, GLENCORE PLC, FORTESCUE METALS GROUP LIMITED – ASX FMG, NEWCREST MINING LIMITED – ASX NCM, ANGLO AMERICAN PLC, HALLIBURTON INCORPORATED, SCHLUMBERGER LIMITED, ORGANISATION OF PETROLEUM EXPORTING COUNTRIES, UNITED STATES. FEDERAL RESERVE BOARD

‘Limited headroom’ for M&A at BHP

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Original article by Amanda Saunders
The Australian Financial Review – Page: 15 : 2-Mar-16

BHP Billiton CEO Andrew Mackenzie recently indicated that abolishing the progressive dividend policy will increase the group’s capacity to pursue mergers and acquisitions. However, Standard & Poor’s analyst May Zhong says that without a rebound in commodity prices BHP will not have much scope for M&A deals. The ratings agency has removed BHP from negative credit watch following the changes to its dividend policy. BHP’s credit rating was downgraded from "A+" to "A" earlier in 2016.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, STANDARD AND POOR’S CORPORATION, SAMARCO MINERACAO SA

More pain before big miners execute M&A

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Original article by Amanda Saunders
The Australian Financial Review – Page: 13 & 18 : 1-Mar-16

A growing number of large Australian mining companies are looking to capitalise on the downturn in commodity prices to pursue acquisitions. South32 CEO Graham Kerr says many companies are likely to be reluctant to offload distressed assets, adding that the real impact of lower commodity prices is unlikely to be felt for another six months. Kerr acknowledges that South32’s healthy balance sheet means it is better-placed that many rivals to seek acquisitions, but he stresses that the group will not rush into any deals.

CORPORATES
SOUTH32 LIMITED – ASX S32, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, UBS HOLDINGS PTY LTD

Fat margins drive gold output to 12-year high

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Original article by Barry FitzGerald
The Australian – Page: 18 : 29-Feb-16

A survey by Surbiton Associates shows that total gold production in Australia rose by two tonnes in 2015, to 285 tonnes, or 9.16 million ounces. Production also increased by one tonne year-on-year in the December quarter, to 73 tonnes. Surbiton’s Sandra Close expects gold production to remain strong in 2016, with several mines resuming operation.

CORPORATES
SURBITON ASSOCIATES PTY LTD, METALS X LIMITED – ASX MLX, SARACEN MINERAL HOLDINGS LIMITED – ASX SAR, BLACKHAM RESOURCES LIMITED – ASX BLK, BARCLAYS BANK PLC