B08 Metal Ore Mining

BHP sees bleak iron ore future

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Original article by Amanda Saunders
The Australian Financial Review – Page: 20 : 4-Nov-15

The price of iron ore has shed 16 per cent in the last eight weeks, reaching a low of $US49.50 per tonne on 2 November 2015. Alan Chirgwin of BHP Billiton is bearish about the outlook for the steel input, forecasting that it will keep falling in the next several years and eventually trade at the break-even price of an unspecified iron ore producer in Australia or Brazil. He expects supply to continue to exceed demand in the next several years. BHP’s Shaun Verner also expects the price of metallurgical coal to remain subdued in the near-term.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, VALE SA, ROY HILL HOLDINGS PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Iron ore to fall further, says Albanese

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Original article by Amanda Saunders
The Australian Financial Review – Page: 15 : 30-Oct-15

The iron ore price fell to $US49.95 per tonne on 28 October 2015, and Vedanta Resources CEO Tom Albanese expects it to come under more downward pressure. He cites factors such as China’s slowing economy and the nation’s falling steel production, which has coincided with increased iron ore output in Australia and Brazil. BC Iron and Grange Resources are particularly vulnerable to a lower iron ore price, as their break-even prices are above $US50/tonne.

CORPORATES
VEDANTA RESOURCES PLC, BC IRON LIMITED – ASX BCI, GRANGE RESOURCES LIMITED – ASX GRR, ATLAS IRON LIMITED – ASX AGO, MOUNT GIBSON IRON LIMITED – ASX MGX, RIO TINTO LIMITED – ASX RIO, BHP BILLITON LIMITED – ASX BHP, FORTESCUE METALS GROUP LIMITED – ASX FMG, ANGLO AMERICAN PLC, VALE SA, UBS HOLDINGS PTY LTD, CHINA METALLURGICAL INDUSTRY PLANNING ASSOCIATION, SUPREME COURT OF INDIA

Fortescue offers BC Iron some rail access slack

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Original article by Tess Ingram
The Australian Financial Review – Page: 31 : 28-Oct-15

The iron ore price was trading at $US51.03 per tonne on 27 October 2015. A new rail tariff deal between Fortescue Metals Group and BC Iron will reduce the latter’s costs by about $A2.3m if the price remains at around this level. The partners in the Nullagine joint venture will trial a new rail access regime whereby the tariff rate is linked to the iron ore price.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, BC IRON LIMITED – ASX BCI

Mackenzie backs keeping London listing

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Original article by James Chessell
The Australian Financial Review – Page: 13 & 18 : 26-Oct-15

Proxy advisers are believed to have recommended that BHP Billiton shareholders vote in favour of a new dividend sharing policy at its 2015 Australian AGM. Some fund managers have suggested that the resolution could prompt BHP to rethink its dual-listed structure, but CEO Andrew Mackenzie says there are many advantages to being listed in both Australia and the UK. He argues that it reduces the cost of raising capital, while many of its institutional shareholders prefer to invest in the UK-listed shares.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, BILLITON PLC, NIKKO ASSET MANAGEMENT GROUP, OWNERSHIP MATTERS PTY LTD, CGI GLASS LEWIS PTY LTD, AUSTRALIAN COUNCIL OF SUPERANNUATION INVESTORS INCORPORATED, SOUTH32 LIMITED – ASX S32, BRAMBLES LIMITED – ASX BXB, TRANS-PACIFIC PARTNERSHIP

Iron ore tipped to hit $US40 by March after Chinese woes

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Original article by Mark Mulligan
The Australian Financial Review – Page: 26 : 23-Oct-15

The iron ore price fell by 0.3 per cent to $US52.79 per tonne on 22 October 2015. Ivan Szpakowski of Citigroup forecasts that the iron ore price will fall to $US50/tonne by the end of 2015 and around $US40/tonne in the first quarter of 2016. He attributes the bearish outlook to factors such as slowing demand for iron ore in China and an increase in global supply.

CORPORATES
CITIGROUP PTY LTD, SHANGHAI BAOSTEEL GROUP CORPORATION, METAL BULLETIN PLC, PRESTIGE ECONOMICS

Spending cuts keep coming as BHP Billiton starts strongly

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Original article by Peter Ker
The Australian Financial Review – Page: 23 & 30 : 22-Oct-15

BHP Billiton has reported that its petroleum division’s output for the September 2015 quarter was 65 million barrels of oil equivalent. The group will reduce the division’s capital expenditure by a further $US200m ($A275m) in 2015-16, to $US2.9bn. Glyn Lawcock of UBS says that while additional cost reductions will be harder to achieve after several years of cutbacks, he believes there is potential for most cost savings. Iron ore, copper and coking coal output exceeded analysts’ forecasts for the quarter.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, UBS HOLDINGS PTY LTD, MORGANS FINANCIAL LIMITED

Supply cuts and firmer demand may lift prices

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Original article by Rose Powell
The Australian Financial Review – Page: 31 : 21-Oct-15

The iron ore price has fallen by 25.2 per cent so far in 2015 and 48.3 per cent in the last year. Oversupply has also prompted the price of Brent crude oil to fall by 15.05 per cent in 2015 and 47.1 per cent over the last 12 months. Julian Jessop of Capital Economics expects the crude oil price to rebound more quickly than iron ore. Meanwhile, HSBC forecasts that iron ore will continue to trade within a range of $US50 to $US60 per tonne for the next several years.

CORPORATES
CAPITAL ECONOMICS LIMITED, HSBC AUSTRALIA HOLDINGS PTY LTD, MORGAN STANLEY AND COMPANY INCORPORATED, CITIGROUP PTY LTD, ORGANISATION OF PETROLEUM EXPORTING COUNTRIES, ROY HILL IRON ORE PTY LTD

BHP may cut dividend if DLC changes fail

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Original article by Peter Ker
The Australian Financial Review – Page: 19 : 21-Oct-15

CGI Glass Lewis has recommended that BHP Billiton shareholders support a resolution to transfer funds from its Australian-listed entity to its UK-listed company. The proposed payment is necessary to allow shareholders in both companies to continue receiving the same dividend payout. CGI Glass Lewis has warned that all shareholders could face lower dividend payouts if the resolution is rejected.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, CGI GLASS LEWIS PTY LTD, SOUTH32 LIMITED – ASX S32

S2 Resources a rare ASX debut

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Original article by Tess Ingram
The Australian Financial Review – Page: 35 : 20-Oct-15

Shares in S2 Resources closed at $A0.175 on debut after listing at $A0.22 on 19 October 2015. S2 is just the third mining company to list on the Australian sharemarket so far in 2015. It holds assets that were previously owned by Sirius Resources, which recently merged with Independence Group. S2 MD Mark Bennett and some analysts expect further heavy trading in the group’s shares to continue in the short-term.

CORPORATES
S2 RESOURCES LIMITED – ASX S2R, INDEPENDENCE GROUP NL – ASX IGO, SIRIUS RESOURCES NL, SOUTH32 LIMITED – ASX S32, BHP BILLITON LIMITED – ASX BHP, BELL POTTER SECURITIES LIMITED, DEUTSCHE BANK AG

BHP’s London listing under fire

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Original article by Amanda Saunders
The Australian Financial Review – Page: 17 & 22 : 20-Oct-15

Nikko Asset Management’s head of Australian equities, Brad Potter, says it is no longer necessary for BHP Billiton to be listed on both the Australian and UK sharemarkets. He argues that rather than reducing BHP’s cost of capital, the dual listing has in fact increased it. Potter also believes that BHP’s progressive dividend policy is unsustainable. He adds that BHP may reconsider the dual listing if shareholders reject a proposal to make a payment to its London-listed company to finance a dividend for British shareholders.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, NIKKO ASSET MANAGEMENT GROUP, RIO TINTO LIMITED – ASX RIO, ARGO INVESTMENTS LIMITED – ASX ARG, SOUTH32 LIMITED – ASX S32, BRAMBLES LIMITED – ASX BXB, LONDON STOCK EXCHANGE