B08 Metal Ore Mining

South32 to ‘walk before it can run’

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Original article by James Chessell
The Australian Financial Review – Page: 13 & 18 : 16-Feb-15

Analysts estimate that South32 will have a market capitalisation of between $A11bn and $A15bn when it lists on the Australian sharemarket in mid-2015. CEO Graham Kerr says that maximising the group’s existing projects and reducing costs will be its main focus at first, rather than acquisitions. However, Paul Young of Deutsche Bank believes that the BHP Billiton spin-off will have to pursue acquisitions, as its scope for organic growth is limited

CORPORATES
SOUTH32 LIMITED, BHP BILLITON LIMITED – ASX BHP, DEUTSCHE BANK AG, RIO TINTO LIMITED – ASX RIO, MACQUARIE GROUP LIMITED – ASX MQG, GLENCORE PLC

Rio Tinto leads $10b in payouts

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Original article by Amanda Saunders
The Australian Financial Review – Page: 1 & 12 : 13-Feb-15

Rio Tinto’s underlying earning for calendar 2014 were nine per cent lower than previously at $US9.3bn, although the result was better than analysts had expected. Rio will repurchase some $US2bn ($A2.6bn) worth of its shares, while a 12 per cent increase in its full-year dividend means a total of $US6bn ($A7.8bn) will be returned to shareholders. The resources group’s net debt has been reduced to $A12.5bn, compared with $US22bn in mid-2013

CORPORATES
RIO TINTO LIMITED – ASX RIO, GLENCORE PLC, DEUTSCHE BANK AG, UBS HOLDINGS PTY LTD, AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED – ASX AFI, BHP BILLITON LIMITED – ASX BHP, TELSTRA CORPORATION LIMITED – ASX TLS, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, TRANSURBAN GROUP LIMITED – ASX TCL, COLONIAL FIRST STATE GLOBAL ASSET MANAGEMENT

More miners steeled for failure

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Original article by Tess Ingram
The Australian Financial Review – Page: 20 : 11-Feb-15

The iron ore price has fallen by 14 per cent so far in 2015, and it was trading at $US61.20 per tonne on 10 February. Andrew Hodge of consulting firm Wood Mackenzie warns that the Koolyanobbing, Carina and Savage River iron ore mines in Australia could potentially be closed if the price remains at around its current level. Wood Mackenzie forecasts that iron ore will average $US70 per tonne in 2015

CORPORATES
WOOD MACKENZIE, ARRIUM LIMITED – ASX ARI, CLIFFS NATURAL RESOURCES INCORPORATED, MINERAL RESOURCES LIMITED – ASX MIN, GRANGE RESOURCES LIMITED – ASX GRR, ATLAS IRON LIMITED – ASX AGO, BC IRON LIMITED – ASX BCI, MOUNT GIBSON IRON LIMITED – ASX MGX, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, MORGAN STANLEY AUSTRALIA LIMITED, CITIGROUP PTY LTD, AUSTRALIA. DEPT OF INDUSTRY AND SCIENCE. BUREAU OF RESOURCES AND ENERGY ECONOMICS

Mongolia flags Rio mine exit

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Original article by Matt Chambers
The Australian – Page: 21 : 6-Feb-15

New Mongolian Prime Minister Saikhanbileg Chimed has signalled a changed approach that may benefit Australian-listed resources group Rio Tinto. It is the parent of Canada-based Turquoise Hill Resources, which in turn holds two thirds of the major Oyu Tolgoi gold and copper mine in Mongolia. A drawn-out dispute over the cost of an underground expansion with the Government may now be resolved, as the state is ready to divest most or all of its 34% stake. Rio would gain full control, but also pay increased royalties and take on more of the upgrade’s cost of $US5bn ($A6.4bn)

CORPORATES
RIO TINTO LIMITED – ASX RIO, TURQUOISE HILL RESOURCES LIMITED, OYU TOLGOI LLC

China’s steel production to fall

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Original article by Sarah-Jane Tasker, Matt Chambers
The Australian – Page: 20 : 5-Feb-15

The iron ore price may fall to below $US60 ($A77) a tonne, having dropped 50% between September 2013 and early February 2015. The commodity is now trading at $US63, but China Iron & Steel Association executive vice secretary-general Li Xinchuang forecasts a further weakening in demand. In response, dominant Australian producers Rio Tinto and BHP Billiton have ramped up their output while also cutting their cash costs by nearly half. Lourenco Goncalves, CEO of US-based rival Cliffs Natural Resources, has criticised the strategy

CORPORATES
CHINA IRON AND STEEL INDUSTRY ASSOCIATION, RIO TINTO LIMITED – ASX RIO, BHP BILLITON LIMITED – ASX BHP, CLIFFS NATURAL RESOURCES INCORPORATED, WHITEHAVEN COAL LIMITED – ASX WHC, ILUKA RESOURCES LIMITED – ASX ILU, SOUTH32 LIMITED, STANDARD AND POOR’S (AUSTRALIA) PTY LTD, NIKKO ASSET MANAGEMENT GROUP

‘Acquisitions the only way’ for South32

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Original article by Amanda Saunders
The Australian Financial Review – Page: 21 : 4-Feb-15

BHP Billiton’s proposed South32 spin-off is slated to debut on the Australian sharemarket by mid-2015. Deutsche Bank’s Paul Young has a valuation of $US13bn ($A16.7bn) on South32, and cautions that the group will have to pursue acquisitions as its scope for organic growth will be limited. He expects South32 to shun BHP’s progressive dividends policy in favour of a payout ratio of 30-40 per cent

CORPORATES
BHP BILLITON LIMITED – ASX BHP, SOUTH32 LIMITED, DEUTSCHE BANK AG, SOUTH AFRICA COAL

Iron ore set for $6bn in writedowns

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Original article by Matt Chambers
The Australian – Page: 18 : 28-Jan-15

Provisioning worth $A5.7bn combined due to the falling iron ore price has so far been announced by Australian producers Arrium, Citic Pacific, Atlas Iron, Mount Gibson Iron, Gindalbie Metals and Grange Resources. Fortescue Metals Group may join them when it issues its output data for the December 2014 quarter on 29 January 2015, while the commodity on 27 January declined a further $US2.88 to $US63.54 a tonne. Fortescue shares closed 2.4% lower at $A2.09, after an intraday low of $A1.92 that had not been seen since 2009

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, ARRIUM LIMITED – ASX ARI, ATLAS IRON LIMITED – ASX AGO, MOUNT GIBSON IRON LIMITED – ASX MGX, GINDALBIE METALS LIMITED – ASX GBG, BC IRON LIMITED – ASX BCI, GRANGE RESOURCES LIMITED – ASX GRR, RIO TINTO LIMITED – ASX RIO, BHP BILLITON LIMITED – ASX BHP, CITIC PACIFIC LIMITED, GOLDMAN SACHS AUSTRALIA PTY LTD, METAL BULLETIN PLC, UBS HOLDINGS PTY LTD, BAILLIEU HOLST LIMITED

Rio moves to solve Mongolian standoff

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Original article by Matt Chambers
The Australian – Page: 24 : 27-Jan-15

Australian-listed resources group Rio Tinto has for some time tried to gain approval for an expansion to underground mining at the Oyu Tolgoi copper and gold operation in Mongolia. Rio owns the majority of Turquoise Hill Resources, which in turn holds two thirds of the asset while the Mongolian Government has the rest. It has now emerged that Rio is offering the Government an increased royalty take, worth $US1.6bn ($A2bn), in order to bring the negotiations to a speedy conclusion

CORPORATES
RIO TINTO LIMITED – ASX RIO, TURQUOISE HILL RESOURCES LIMITED, OYU TOLGOI LLC

Atlas boss backs royalty easing

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Original article by Paul Garvey
The Australian – Page: 19 : 21-Jan-15

Atlas Iron has advised that it lost around $US3 for each tonne of iron ore that it shipped in the December 2014 quarter, due to the sharp decline in the price of the steel input. MD Ken Brinsden has welcomed the Western Australian Government’s temporary measure of a 50 per cent rebate on iron ore royalties for smaller producers. He adds that the royalty relief should boost Atlas’s quarterly cash flow by about $A8m in 2015

CORPORATES
ATLAS IRON LIMITED – ASX AGO, FORTESCUE METALS GROUP LIMITED – ASX FMG

BHP wants tailings at mine to rise 13 storeys

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Original article by Matt Chambers
The Australian – Page: 16 : 12-Jan-15

Along with those of other commodities, the price of copper has declined 15% between mid-2014 and January 2015. An earnings drop of $US1.5bn ($A1.8bn) will be suffered by BHP Billiton due to the $US0.50-a-pound drop. The company is asking the Federal Government for permission to increase the size of its tailings storage at the Olympic Dam copper and uranium mine in South Australia by a quarter. The move is part of a minor change at the facility, not a prelude to the large expansion that has been shelved by BHP

CORPORATES
BHP BILLITON LIMITED – ASX BHP