B08 Metal Ore Mining

Rio iron ore boss keeps eye on prize

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Original article by Amanda Saunders
The Australian Financial Review – Page: 17 & 22 : 4-Jun-15

Rio Tinto’s iron ore operations boasted a cash cost of about $US20 per tonne in the first half of 2014-15, but the group aims to reduce this to $US17/tonne in the second half. Andrew Harding, the head of the iron ore division, concedes that it is getting harder to further reduce costs after Rio’s aggressive push in recent years. Rio is also negotiating more favourable contracts with its suppliers and introducing automation technology.

CORPORATES
RIO TINTO LIMITED – ASX RIO, BHP BILLITON LIMITED – ASX BHP, FORTESCUE METALS GROUP LIMITED – ASX FMG, VALE SA

Atlas strikes deal to get Mt Webber mine going

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Original article by Tess Ingram
The Australian Financial Review – Page: 16 : 3-Jun-15

Atlas Iron expects to resume production at its Mt Webber iron ore mine in Western Australia in July 2015. Atlas has secured a new deal with mining contractor BGC Contracting, which will be paid both cash and shares, although the value of the deal will be linked to Atlas’s proposed capital raising. Atlas previously struck new deals with other contractors, including McAleese. Atlas anticipates that Mt Webber’s break-even price will be $US50 when mining resumes. Annual production is slated to be six million tonnes.

CORPORATES
ATLAS IRON LIMITED – ASX AGO, BGC CONTRACTING PTY LTD, McALEESE LIMITED – ASX MCS, MACA LIMITED – ASX MLD, QUBE HOLDINGS LIMITED – ASX QUB, MOODY’S INVESTORS SERVICE INCORPORATED

China scopes local iron ore

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Original article by Tess Ingram
The Australian Financial Review – Page: 11 : 2-Jun-15

The iron ore price is trading at about $US63 per tonne, having shed nearly 50 per cent in the last year. Adam Handley of law firm Minter Ellison notes that the sharp fall in the price of the steel input has prompted Chinese companies to consider mergers and acquisitions in Australia, as well as debt and equity deals with embattled producers. He adds that Chinese investors have become more willing to pursue hostile takeovers.

CORPORATES
MINTER ELLISON, FORTESCUE METALS GROUP LIMITED – ASX FMG, CITIC LIMITED, SHANGHAI BAOSTEEL GROUP CORPORATION, RECORD POINT PTY LTD, SINO IRON PTY LTD, CITIGROUP PTY LTD, BC IRON LIMITED – ASX BCI, GRANGE RESOURCES LIMITED – ASX GRR, ARRIUM LIMITED – ASX ARI, CLIFFS NATURAL RESOURCES INCORPORATED, GINDALBIE METALS LIMITED – ASX GBG, MOUNT GIBSON IRON LIMITED – ASX MGX, MINERAL RESOURCES LIMITED – ASX MIN

Fortescue pushes for ore inquiry in WA

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Original article by Amanda Saunders
The Australian Financial Review – Page: 11 : 2-Jun-15

Fortescue Metals Group is expected to lobby Western Australia’s economics standing committee to hold a parliamentary inquiry into the iron ore industry. Opposition MP Bill Johnston failed in a recent bid for parliament to hold such an inquiry, while Premier Colin Barnett holds the view that a parliamentary inquiry would not be appropriate. The Australian Government has also rejected Fortescue’s request for a federal inquiry.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, WESTERN AUSTRALIA. LEGISLATIVE ASSEMBLY STANDING COMMITTEE ON ECONOMICS AND INDUSTRY, WESTERN AUSTRALIA. DEPT OF THE PREMIER AND CABINET, AUSTRALIAN LABOR PARTY, NATIONAL PARTY OF AUSTRALIA, LIBERAL PARTY OF WESTERN AUSTRALIA, AUSTRALIA. PRODUCTIVITY COMMISSION, MINERALS COUNCIL OF AUSTRALIA

Mining exploration dips by 76pc in three years

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Original article by Tess Ingram
The Australian Financial Review – Page: 12 : 2-Jun-15

Data from the Australian Bureau of Statistics shows that mining corporations spend just $A381m on exploration programs in the March 2015 quarter, which is 13.4 per cent lower than previously. Spending on exploration in Queensland and Western Australia were hardest hit, recording declines of 32 per cent and 12 per cent respectively. Expenditure on iron ore exploration fell by 43.4 per cent during the quarter, and it has fallen by 76 per cent over the last three years.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, ASSOCIATION OF MINING AND EXPLORATION COMPANIES, BOART LONGYEAR LIMITED – ASX BLY

Fortescue CFO hits back at Vale

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Original article by Perry Williams
The Australian Financial Review – Page: 15 & 20 : 1-Jun-15

The break-even price for iron ore producer Fortescue Metals Group was about $US60 per tonne in late 2014, but the group aims to reduce this to $US41 during the next three months. CFO Stephen Pearce says Fortescue expects its break-even price to fall slightly below that of Brazilian rival Vale in the near-term. He has also rejected suggestions by the China Iron & Steel Association’s Li Xinchuang that Fortescue will need to take on an equity partner.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, VALE SA, CHINA IRON AND STEEL INDUSTRY ASSOCIATION, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, DEUTSCHE BANK AG, MINERALS COUNCIL OF AUSTRALIA

Iron ore miners told to prepare for rough ride

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Original article by Rose Powell, Julie-anne Sprague
The Australian Financial Review – Page: 22 : 29-May-15

Iron ore was trading at $US63.10 per tonne on 28 May 2015. The China Metallurgical Industry Planning & Research Institute’s president, Xinchuang Li, expects it to trade within a range of $US55 to $US65 per tonne over the next several years. He adds that strong competition in China’s steel industry will keep downward pressure on the prices of both iron ore and steel. China imported 933 million tonnes of iron ore in 2014.

CORPORATES
CHINA METALLURGICAL INDUSTRY PLANNING AND RESEARCH INSTITUTE, STOCKBROKERS ASSOCIATION OF AUSTRALIA LIMITED, FORTESCUE METALS GROUP LIMITED – ASX FMG, WESTERN AUSTRALIA. DEPT OF THE PREMIER AND CABINET, CITIGROUP PTY LTD, GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO

It’s ‘inevitable’ Fortescue will need a Chinese equity partner

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Original article by Perry Williams
The Australian Financial Review – Page: 17 & 22 : 28-May-15

The China Iron & Steel Association’s deputy secretary Li Xinchuang believes that Fortescue Metals Group will eventually need an equity partner in order to be globally competitive. He argues that a Chinese partner would make sense for Fortescue, and notes that the iron ore producer’s high level of debt could become a problem unless it takes on an equity partner. Fortescue CEO Nev Power has stressed several times that an equity partner is not on the group’s agenda.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, CHINA IRON AND STEEL INDUSTRY ASSOCIATION, CHINA METALLURGICAL INDUSTRY PLANNING ASSOCIATION, SHANGHAI BAOSTEEL GROUP CORPORATION, CITIC LIMITED, AUSTRALIA. FOREIGN INVESTMENT REVIEW BOARD, VALE SA, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO

UBS slaps a buy on gold stocks – except for two

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Original article by Stephen Cauchi
The Australian Financial Review – Page: 27 : 28-May-15

The gold price is trading at around $US1,188 per ounce, compared with $US1,150 in March 2015. UBS is bullish about most Australian-listed gold producers, and its top picks include Evolution Mining and Alacer Gold. However, UBS has a "neutral" recommendation on Independence Group and a "sell" rating on Newcrest Mining. Meanwhile, Reuters notes that there has been an upturn in mergers and acquisitions in the gold sector in 2015.

CORPORATES
UBS HOLDINGS PTY LTD, EVOLUTION MINING LIMITED – ASX EVN, ALACER GOLD CORPORATION – ASX AQG, INDEPENDENCE GROUP NL – ASX IGO, NEWCREST MINING LIMITED – ASX NCM, OCEANAGOLD CORPORATION – ASX OGC, ENDEAVOUR MINING CORPORATION – ASX EVR, PERSEUS MINING LIMITED – ASX PRU, SILVER LAKE RESOURCES LIMITED – ASX SLR, REGIS RESOURCES LIMITED – ASX RRL, BEADELL RESOURCES LIMITED – ASX BDR, LA MANCHA RESOURCES INCORPORATED, BARRICK GOLD CORPORATION, NORTHERN STAR RESOURCES LIMITED – ASX NST, MINE LIFE PTY LTD, REUTERS HOLDINGS PLC

Fortescue’s secret shell in Singapore

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Original article by Amanda Saunders
The Australian Financial Review – Page: 1 & 8 : 27-May-15

Fortescue Metals Group chairman Andrew Forrest recently criticised BHP Billiton and Rio Tinto for using marketing hubs in Singapore, which has lower corporate tax rate than Australia. However, it has been revealed that Fortescue itself established a Singapore-based iron ore marketing company in January 2014. The iron ore price has since shed around 55 per cent, which has significantly reduced Fortescue’s profits.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE INTERNATIONAL MARKETING, AUSTRALIAN TAXATION OFFICE, GLENCORE PLC, VALE SA