B08 Metal Ore Mining

Tax-slugged miners are bankrolling us all

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Original article by Geoff Chambers
The Australian – Page: 2 : 10-Mar-20

A report produced by KPMG on behalf of the Minerals Council of Australia highlights the importance of the mining sector to government revenue. It shows that corporate taxes and royalties have accounted for 39- 49 per cent of the sector’s earnings since 2011-12. MCA CEO Tania Constable says that on average, the minerals sector has paid more than $20bn in taxes and royalties annually over this period. She adds that the sector is helping to finance infrastructure projects and the salaries of public sector workers such as teachers and nurses.

CORPORATES
MINERALS COUNCIL OF AUSTRALIA, KPMG AUSTRALIA PTY LTD

Chinese back Rio ore mine in Africa

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Original article by Nick Evans
The Australian – Page: 24 : 6-Mar-20

Media reports have suggested that China’s State-owned Assets Supervision & Administration Commission will approve an investment in the Simandou iron ore deposit in Guinea. SASAC oversees investments made by Chinese government-owned enterprises such as Chinalco, which is one of Rio Tinto’s partners in the deposit. The massive cost of developing the Simandou deposit – which has been estimated at around $US20bn ($30.2bn) – has contributed to the project being stalled for more than two decades.

CORPORATES
RIO TINTO LIMITED – ASX RIO, CHINA. STATE-OWNED ASSETS SUPERVISION AND ADMINISTRATION COMMISSION, ALUMINIUM CORPORATION OF CHINA LIMITED

Iron ore mining giants in virus vigil over fly-in, fly-out workforce

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Original article by Brad Thompson
The Australian Financial Review – Page: 22 : 5-Mar-20

Fortescue Metals Group has asked all employees who have travelled overseas to remain at home for 14 days before returning to work. One employee was quarantined at the Christmas Creek iron ore mine after reporting flu-like symptoms following a trip to Bali, and Fortescue has confirmed that they have tested negative for the virus. BHP and Rio Tinto are also actively taking measures to protect their workforces from the coronavirus at their iron ore mines.

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

Fool’s gold: $2bn hedge hole

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Original article by Nick Evans
The Australian – Page: 17 & 20 : 5-Mar-20

The gold price is currently trading at around $2,450 an ounce in Australian dollar terms. However, the nation’s leading gold producers have locked in forward sales of more than three million ounces at prices well below this level. Newcrest Mining stands to incur the biggest loss from gold hedging, having locked in sales of more than 658,000 ounces from the Telfer mine at just $1,875 an ounce over the next three years.

CORPORATES
NEWCREST MINING LIMITED – ASX NCM

China steel stockpiles a worrying sign

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Original article by Simon Evans, Peter Ker
The Australian Financial Review – Page: 16 : 3-Mar-20

There are reports of growing stockpiles of steel in China, which accounts for around half of the world’s production. Stockpiles have increased because construction companies and other steel users in China have been in partial shutdown due to the coronavirus, and the growing stockpiles have sparked concern of a knock-on effect to Australian iron ore miners such as Fortescue Metals Group and BHP. However, Fortescue CEO Elizabeth Gaines says the coronavirus has not impacted on its shipping schedule at this stage, while she notes that Chinese steel mills are still operating.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, BLUESCOPE STEEL LIMITED – ASX BSL

Forrest boosts his stake in Fortescue

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Original article by Melissa Yeo
The Weekend Australian – Page: 24 : 29-Feb-20

Fortescue Metals Group has advised that chairman and founder Andrew Forrest bought more than 22 million shares in the pure-play iron ore miner between 20 and 27 February. Forrest paid some $242m to lift his stake in Fortescue from 30 per cent to about 36 per cent. Forrest will receive $828m in dividends for the first half of 2019-20 after Fortescue recently announced an interim dividend of $0.76 per share.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG

Investors back Rio payout cut for climate

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Original article by Peter Ker
The Australian Financial Review – Page: 21 : 2-Mar-20

Camille Simeon of Aberdeen Standard Investments says mining companies such as Rio Tinto needs to consider the short-term financial costs of taking action on climate change compared with the long-term cost of inaction. She warns that miners may incur higher costs of capital, stranded assets, reduced demand and lower shareholder returns if they fail to reduce carbon emissions. Ross Illingworth of Kingfisher Capital Partners has praised Rio Tinto CEO Jean-Sebastien Jacques for asking shareholders whether they are willing to accept lower dividends in return for faster progress on reducing emissions.

CORPORATES
RIO TINTO LIMITED – ASX RIO, ABERDEEN STANDARD INVESTMENTS AUSTRALIA LIMITED, KINGFISHER CAPITAL PARTNERS

Rio shareholders want dividends and climate action

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Original article by Peter Ker
The Australian Financial Review – Page: 21 : 28-Feb-20

Rio Tinto has released a report which notes that some of its investments aimed at reducing carbon emissions will generate returns that are below its typical thresholds. The resources giant has set a net zero emissions target of 2050, and CEO Jean-Sebastien Jacques says this is likely to include the use of carbon offsets. He has used an investor briefing in London to raise the question of whether shareholders are willing to accept lower dividend payouts in return for faster progress on reducing emissions.

CORPORATES
RIO TINTO LIMITED – ASX RIO

China will act quickly to spur economy: Rio

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Original article by Peter Ker
The Australian Financial Review – Page: 15 & 22 : 27-Feb-20

Rio Tinto has reported underlying earnings of $US10.37bn ($15.77bn) for 2019. The result was bolstered by a strong rise in the iron ore price; the group’s average received price was 37 per cent higher than in 2018. Meanwhile, Rio Tinto has warned that both the Chinese and global economies will be adversely affected by the coronavirus outbreak in the March quarter. However, CEO Jean-Sebastien Jacques expects the Chinese government to pursue stimulus measures, which will in turn boost demand for commodities. Shareholders will receive a final dividend of $US2.31 per share.

CORPORATES
RIO TINTO LIMITED – ASX RIO

Rio to spend $US1b on climate

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Original article by Peter Ker
The Australian Financial Review – Page: 22 : 27-Feb-20

Rio Tinto has updated its climate change policies, which now include a net zero carbon emissions target of 2050. In addition, the resources group aims to reduce its scope 1 and scope 2 emissions to 15 per cent of 2018 levels by 2030, while it has set a goal of reducing its emissions intensity to 30 per cent of 2018 levels by the same date. However, it has not set any targets for scope 3 emissions. Rio Tinto has also committed to investing $US1bn ($1.5bn) in climate initiatives over the next five years.

CORPORATES
RIO TINTO LIMITED – ASX RIO