B08 Metal Ore Mining

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

Rio sticks to strategy amid weather woes

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Original article by Amanda Saunders
The Australian Financial Review – Page: 13 & 18 : 17-Jul-15

Rio Tinto expects to export 340 million tonnes of iron ore in 2015, compared with previous expectations of 350 million tonnes. Rio has attributed the downgrade to the impact of adverse weather events during the first half of the calendar year, which disrupted production and reduced port capacity. Citigroup estimates that Rio will have to increase its iron ore shipments and fall back on stockpiles to achieve its revised full-year export target. The group’s shares closed 0.3 per cent higher at $A53.31 on 16 July.

CORPORATES
RIO TINTO LIMITED – ASX RIO, CITIGROUP PTY LTD, CREDIT SUISSE (AUSTRALIA) LIMITED, FORTESCUE METALS GROUP LIMITED – ASX FMG, BHP BILLITON LIMITED – ASX BHP

Mt Gibson iron ore mine may close if prices stay low

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Original article by Tess Ingram
The Australian Financial Review – Page: 22 : 16-Jul-15

Mount Gibson Iron achieved a 15 per cent reduction in costs at its Extension Hill iron ore mine in Western Australia during the second half of 2014-15. The group aims to further reduce costs in 2015-16, with production slated to rise from three million tonnes per annum to at least 3.5 million tonnes. However, CEO Jim Beyer has not ruled out closing the mine if the iron ore price remains subdued. The steel input is trading at around $US50 per tonne.

CORPORATES
MOUNT GIBSON IRON LIMITED – ASX MGX

BHP, Rio investors not tempted by rising yield

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Original article by Amanda Saunders
The Australian Financial Review – Page: 13 : 14-Jul-15

The share prices of BHP Billiton and Rio Tinto have fallen sharply in the last 12 months, although they continue to offer strong dividend yields. However, institutional investors such as the Australian Foundation Investment Company and Argo Investments are not capitalising on the rising yield to increase their shareholdings. Michelle Lopez of Aberdeen Asset Management says a key issue for investors is whether BHP can sustain its progressive dividend policy.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED – ASX AFI, ARGO INVESTMENTS LIMITED – ASX ARG, ABERDEEN ASSET MANAGEMENT LIMITED, CITIGROUP PTY LTD

BHP and Rio braced and ready for iron ore’s ‘new normal’

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Original article by Amanda Saunders, Tess Ingram
The Australian Financial Review – Page: 13 & 18 : 10-Jul-15

Some analysts believe that the iron ore price could fall below $US40 per tonne as production ramps up in Australia and abroad. The price of the steel input fell below $US45/tonne on 8 July 2015, prompting speculation about the viability of some high-cost smaller iron ore miners. Andrew Harding, the head of Rio Tinto’s iron ore division, remains upbeat about the long-term outlook for the commodity. He says iron ore is now trading at around its long-term average, and argues that record high prices were not sustainable.

CORPORATES
RIO TINTO LIMITED – ASX RIO, BHP BILLITON LIMITED – ASX BHP, ATLAS IRON LIMITED – ASX AGO, FORTESCUE METALS GROUP LIMITED – ASX FMG, BC IRON LIMITED – ASX BCI, MOUNT GIBSON IRON LIMITED – ASX MGX, RBC CAPITAL MARKETS, ARRIUM LIMITED – ASX ARI, CLIFFS NATURAL RESOURCES INCORPORATED, MORNINGSTAR PTY LTD, VALE SA, ANGLO AMERICAN PLC, HANCOCK PROSPECTING PTY LTD, ROY HILL IRON ORE PTY LTD, ARGONAUT SECURITIES PTY LTD

Mine closures forecast as iron ore prices plunge

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Original article by Amanda Saunders, Tess Ingram
The Australian Financial Review – Page: 21 & 26 : 9-Jul-15

Katana Asset Management’s Romano Sala Tenna expects a number of Australian iron ore mines to cease production in the next 12 months. He says some of the cost reduction strategies utilised in the last year are unsustainable, and also notes the dearth of capital investment in many iron ore mines. Pengana Capital’s Tim Schroeders also has doubts as to whether cost-cutting measures can be sustained in the long-term. The iron ore price has fallen below $US50 per tonne, which may put further pressure on smaller producers.

CORPORATES
KATANA ASSET MANAGEMENT LIMITED, PENGANA CAPITAL LIMITED, ATLAS IRON LIMITED – ASX AGO, UBS HOLDINGS PTY LTD, FORTESCUE METALS GROUP LIMITED – ASX FMG, ROY HILL IRON ORE PTY LTD, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, VALE SA, GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD

Atlas founder keeps faith as raising looms

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Original article by Tess Ingram, Amanda Saunders
The Australian Financial Review – Page: 15 & 20 : 8-Jul-15

Atlas Iron’s current shareholders have agreed to contribute $A15m to the iron ore producer’s $A180m capital raising. Atlas MD David Flanagan is confident that the raising will be well-received, despite the 20 per cent fall in the iron ore price in recent weeks. Flanagan has concluded an international roadshow, and will shortly pitch the capital raising to Australian retail and institutional investors. Atlas will offer the new shares at $A0.05 apiece.

CORPORATES
ATLAS IRON LIMITED – ASX AGO, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, PENGANA CAPITAL LIMITED