B08 Metal Ore Mining

Iron ore recovery to be ‘short term’

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Original article by Rose Powell
The Australian Financial Review – Page: 23 : 31-Jul-15

The price of iron ore rose by 4.57 per cent on 30 July 2015, to $US55.89 per tonne, after reaching a low of $US45 earlier in the month. Kelly Teoh of Clarksons does not expect the upturn to be sustained and warns that the iron ore price will fall again. Ric Spooner of CMC Markets agrees, noting that the commencement of production at projects such as Roy Hill will weigh on the iron ore price.

CORPORATES
CLARKSONS, CMC MARKETS PTY LTD, BLOOMBERG LP, ROY HILL IRON ORE PTY LTD, RIO TINTO LIMITED – ASX RIO, BHP BILLITON LIMITED – ASX BHP, FORTESCUE METALS GROUP LIMITED – ASX FMG, UBS HOLDINGS PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD, QUAY EQUITIES PTY LTD

BHP to cut 37pc of jobs in Melbourne

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Original article by Matthew Stevens, Amanda Saunders
The Australian Financial Review – Page: 15 & 20 : 29-Jul-15

BHP Billiton is expected to retrench, relocate or redeploy about 100 employees at its head office in Melbourne in the next 18 months. The resources group has previously shed about 80 jobs at the Melbourne office, and the latest proposed cuts are likely to reduce staff numbers to about 300. BHP also intends to make cutbacks in other areas, including its legal and corporate affairs teams, while its Treasury division will be relocated to the UK.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, SOUTH32 LIMITED – ASX S32

Atlas Iron shares slide after return to trading

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Original article by Peter Ker, Tess Ingram
The Australian Financial Review – Page: 16 : 28-Jul-15

More than 266 million Atlas Iron shares changed hands on 27 July 2015, after the stock traded for the first time since April. The iron ore producer’s shares closed at $A0.036 after reaching an intra-day low of $A0.031, and Matthew Keane of Argonaut believes that the stock could fall further Atlas shares were placed in a trading halt at $A0.12 in April, and the latest slump has reduced its market capitalisation to just $A95.9m.

CORPORATES
ATLAS IRON LIMITED – ASX AGO, ARGONAUT SECURITIES PTY LTD, BGC CONTRACTING PTY LTD, McALEESE LIMITED – ASX MCS

Gold’s fair value is $US750: Deutsche

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Original article by Stephen Cauchi
The Australian Financial Review – Page: 25 : 28-Jul-15

Gold was trading at about $US1,096 per ounce on 27 July 2015, although Deutsche Bank believes that the precious metal remains significantly overvalued. The investment bank has released a report which concludes that "fair value" for gold is around $US785 an ounce. However, the report also states that in real terms the gold price would have to fall to around $US750/ounce in order to be trading at its historical average.

CORPORATES
DEUTSCHE BANK AG, ABN AMRO BANK NV, UNITED STATES. FEDERAL RESERVE BOARD, CAPITAL ECONOMICS LIMITED, WORLD BANK

Rinehart lieutenant bullish on ore, flags Roy Hill delays

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Original article by Perry Williams
The Australian Financial Review – Page: 13 & 18 : 27-Jul-15

Iron ore was trading at $US51 per tonne on 24 July 2015, but Hancock Prospecting executive director Tad Watroba expects it to rebound to $US80, due to factors such as continued strong demand from China. Meanwhile, Watroba has indicated that factors such as inclement weather and safety concerns will delay the start of production at the Roy Hill iron ore project until early October. Production had been initially slated to commence in September.

CORPORATES
HANCOCK PROSPECTING PTY LTD, ROY HILL HOLDINGS PTY LTD, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, VALE SA, FORTESCUE METALS GROUP LIMITED – ASX FMG, CHINA IRON AND STEEL INDUSTRY ASSOCIATION, POSCO, MARUBENI CORPORATION, CHINA STEEL CORPORATION, CREDIT SUISSE (AUSTRALIA) LIMITED

Goods prices tipped to bottom out

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Original article by Stephen Cauchi
The Australian Financial Review – Page: 23 : 24-Jul-15

The iron ore price is currently trading at around $US51.76 per tonne, while thermal coal is fetching $US60.45 a tonne and crude oil is trading at $US56.11 per barrel. A report from the World Bank forecasts that the prices of all three commodities will remain subdued for the remainder of 2015, although an upturn is expected in 2016. Iron ore is forecast to average $US55 per tonne in 2015, before rising to $US56.70 in 2016.

CORPORATES
WORLD BANK, THE GOLDMAN SACHS GROUP INCORPORATED, MORGAN STANLEY AND COMPANY INCORPORATED, UBS HOLDINGS PTY LTD, BLOOMBERG LP, CITIGROUP PTY LTD, RBC CAPITAL MARKETS

BHP iron ore to grow despite tough 2016

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Original article by Amanda Saunders
The Australian Financial Review – Page: 17 & 22 : 23-Jul-15

BHP Billiton’s iron ore production topped 254 million tonnes in 2014-15, and the group expects to increase output by six per cent in the 2015-16 financial year. BHP anticipates lower production of copper, petroleum, metallurgical coal and thermal coal in 2015-16, although Glyn Lawcock of UBS expects production of most of these commodities to rise in the following year. BHP aims to reduce its iron ore production costs to $US16 per tonne in 2015-16, compared with its break-even price of about $A32 per tonne.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, UBS HOLDINGS PTY LTD, RIO TINTO LIMITED – ASX RIO, SOUTH32 LIMITED – ASX S32, NICKEL WEST

Commodity rout to dog miners

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

BHP Billiton recently wrote down the value of its US shale assets by $US2.8bn. Analysts expect many resources groups to announce write-downs of key commodities during the next year, due to the sharp downturn in the prices of commodities such as iron ore, crude oil and coal. BHP, Rio Tinto, Glencore and Anglo American are tipped to report large declines in their underlying earnings as a result of bearish commodity markets.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, GLENCORE PLC, ANGLO AMERICAN PLATINUM CORPORATION, UBS HOLDINGS PTY LTD, LIBERUM CAPITAL LIMITED

Atlas adds $86m but well short of target

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Original article by Tess Ingram
The Australian Financial Review – Page: 17 : 21-Jul-15

The capital raising of Australian-listed Atlas Iron has fallen significantly short of its $A180m target. The iron ore producer has raised about $A30m from retail investors and around $A12m from institutional investors, while its contractors had previously agreed to subscribe to some $A44m worth of shares. Atlas shares were suspended from trading in April 2015, and the stock may resume trading on 27 July.

CORPORATES
ATLAS IRON LIMITED – ASX AGO, McALEESE LIMITED – ASX MCS, QUBE HOLDINGS LIMITED – ASX QUB, MACA LIMITED – ASX MLD, WESTERN ASSET MANAGEMENT COMPANY, FORTRESS INVESTMENT GROUP LLC, SANKATY ADVISORS LLC, MARATHON ASSET MANAGEMENT LIMITED

Cheap debt to buoy Rio, BHP dividends, but for limited time only

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Original article by Amanda Saunders
The Australian Financial Review – Page: 13 : 20-Jul-15

BHP Billiton’s progressive dividend policy is expected to cost it about $US6.5bn ($A8.7bn) in fiscal 2015, while Rio Tinto faces a $US4.1bn impost by maintaining the policy. Ben Davis of Liberum Capital argues that the resources giants should finance their progressive dividend policies via debt, saying the low cost of accessing debt markets will make this a viable strategy for several years. He notes that some investors would sell out of BHP and Rio if they adopted a dividend payout ratio.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, LIBERUM CAPITAL LIMITED, GLENCORE PLC, ABERDEEN ASSET MANAGEMENT LIMITED, CITIGROUP PTY LTD, ANGLO AMERICAN PLC