B08 Metal Ore Mining

Miners soar as gold and iron ore prices rise

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Original article by Paul Garvey
The Australian – Page: 24 : 6-Feb-19

Peter O’Connor of Shaw & Partners notes that Australian mining stocks have gained 17 per cent since 20 December. Shares in Fortescue Metals Group, BHP and Rio Tinto rallied on 5 February, after the spot price of iron ore for delivery to the port of Qingdao in China rose above $US81 per tonne. Analysts note that the market’s response to the latest iron ore tailings dam disaster in Brazil has been markedly different to the Samarco tragedy in 2015, when commodity prices had already been retreating.

CORPORATES
SHAW AND PARTNERS LIMITED, FORTESCUE METALS GROUP LIMITED – ASX FMG, BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, VALE SA, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, ARGONAUT SECURITIES PTY LTD

Activist sees end of BHP dual-list

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Original article by Paul Garvey
The Australian – Page: 19 : 5-Feb-19

Activist hedge fund Elliott Management argues that BHP’s $529m settlement of a tax dispute in November has strengthened the case for the abolition of its dual-listed structure. Elliott CEO Paul Singer believes that such a move would have broad support among BHP shareholders in the wake of the deal with the Australian Taxation Office regarding its Singapore marketing hub. However, British shareholders may be reluctant to support scrapping the dual listing, which could potentially result in BHP’s removal from the FTSE 100.

CORPORATES
BHP GROUP LIMITED – ASX BHP, ELLIOTT MANAGEMENT CORPORATION, AUSTRALIAN TAXATION OFFICE, FTSE 100 INDEX, FEDERAL COURT OF AUSTRALIA, RIO TINTO LIMITED – ASX RIO, GLENCORE PLC

Iron ore surge predicted to be temporary

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Original article by Timothy Moore
The Australian Financial Review – Page: 23 : 4-Feb-19

The spot price of iron ore rose above $US85 per tonne in the wake of the latest tailings dam disaster in Brazil. Goldman Sachs and Fitch Ratings are among the firms that have upgraded their iron ore price forecasts, and Capital Economics has suggested that it could peak at around $US100 per tonne. Meanwhile, Liberum Research still expects the iron ore price to retreat to $US50/tonne in 2019 and around $US40/tonne in 2020.

CORPORATES
THE GOLDMAN SACHS GROUP INCORPORATED, FITCH RATINGS LIMITED, CAPITAL ECONOMICS LIMITED, LIBERUM RESEARCH, VALE SA, FASTMARKETS MB

China demand to drive earnings: Fortescue

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Original article by Perry Williams
The Australian – Page: 24 : 1-Feb-19

Fortescue Metals Group has advised that its iron ore shipments for the December 2018 quarter totalled 42.5 million tonnes, an increase of five per cent year-on-year. The result included its first shipments of the higher-grade West Pilbara Fines. Meanwhile, Fortescue expects its earnings to be boosted by renewed demand for lower-grade iron ore among Chinese steel mills. The pure-play miner also says it is too soon to determine the likely impact of the latest tailings dam collapse in Brazil on the iron ore price.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, VALE SA

Dam disaster fuels surge in iron ore price

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Original article by Perry Williams
The Australian – Page: 17 & 20 : 31-Jan-19

Goldman Sachs has upgraded its 2019 forecast for iron ore after the price of the steel input rose 4.4 per cent to $US78.50 ($109) a tonne in response to another tailings dam disaster in Brazil. Goldman Sachs now has a price forecast of $US65 per tonne, compared with $US60 previously. The federal government’s mid-year budget update had forecast that the iron ore price would average $US55 per tonne in 2019. Vale has indicated that its annual iron ore production could be cut by up to 40 million tonnes due to the dam collapse. This would equate to about 10 per cent of its annual output.

CORPORATES
VALE SA, THE GOLDMAN SACHS GROUP INCORPORATED, BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, SHAW AND PARTNERS LIMITED, AUSTRALIA. DEPT OF INDUSTRY, INNOVATION AND SCIENCE, MACQUARIE GROUP LIMITED – ASX MQG, TUV SUD

Tax law loss delivers $82m hit to BHP

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Original article by Ben Butler
The Australian – Page: 19 : 30-Jan-19

The full Federal Court has overturned the Administrative Appeals Tribunal’s ruling that BHP and its London-listed arm are not associates for tax purposes. The case centred on the Australian Taxation Office’s dispute with BHP over its controversial marketing hub in Singapore. The ATO had alleged that BHP’s dual-listing agreement meant that its Australian division had to pay tax on the British arm’s profits under rules governing controlled foreign corporations.

CORPORATES
BHP GROUP LIMITED – ASX BHP, AUSTRALIAN TAXATION OFFICE, AUSTRALIA. ADMINISTRATIVE APPEALS TRIBUNAL, FEDERAL COURT OF AUSTRALIA, HUNTER VALLEY COAL CORPORATION

OZ says copper won’t be hit by slowdown

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Original article by Simon Evans
The Australian Financial Review – Page: 19 : 25-Jan-19

OZ Minerals CEO Andrew Cole is confident that strong demand for copper and the lack of major new discoveries means the copper price will ride out any downturn in the global economy. Meanwhile, production at OZ Minerals’ Carrapateena mine in South Australia is scheduled to begin in the final quarter of 2019, and Cole says it should reach full production within 18 months. He is also optimistic that the Prominent Hill mine’s will remain in production beyond 2030, when it is currently slated to close.

CORPORATES
OZ MINERALS LIMITED – ASX OZL, ANGLO AMERICAN PLC, VALE SA, MMX MINERACAO E METALICOS SA

Runaway train set to derail BHP earnings

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Original article by Perry Williams
The Australian – Page: 15 & 16 : 23-Jan-19

BHP has advised that it produced 135 million tonnes of iron ore in the first half of 2018-19, with output falling by four million tonnes due to a train derailment in the Pilbara in early November. BHP’s copper output in turn was affected by problems at the Olympic Dam mine in South Australia and the Spencer mine in Chile. Shaw & Partners says BHP can still meet its full-guidance provided it has a strong second half. BHP shares closed 1.3 per cent lower at $32.77 on 22 January.

CORPORATES
BHP GROUP LIMITED – ASX BHP, SHAW AND PARTNERS LIMITED, MORGAN STANLEY AUSTRALIA LIMITED, VERTIUM ASSET MANAGEMENT PTY LTD, ORD MINNETT GROUP LIMITED

WA digs deeper on BHP royalties

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Original article by Ben Butler
The Australian – Page: 15 & 16 : 22-Jan-19

Western Australia’s Treasurer Ben Wyatt says the state government will pursue BHP for backdated iron ore royalties totalling between $200m and $300m. He claims that an audit undertaken in 2016 had revealed that the resources group had underpaid royalties since the early 2000s. BHP had reached a $529m settlement with the Australian Taxation Office regarding its Singapore marketing hub in November 2018.

CORPORATES
BHP GROUP LIMITED – ASX BHP, WESTERN AUSTRALIA. DEPT OF TREASURY AND FINANCE, AUSTRALIAN TAXATION OFFICE, RIO TINTO LIMITED – ASX RIO, SUPREME COURT OF QUEENSLAND

Rio Tinto eyes cash returns, record tonnage

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Original article by Melissa Yeo
The Australian – Page: 16 : 22-Jan-19

Glyn Lawcock of UBS says Rio Tinto could potentially expand its share buyback program and pay a special dividend in 2019 using the proceeds of asset sales. He estimates that the resources group still has about $U4.4bn on hand from asset sales that could be returned to shareholders. Meanwhile, UBS forecasts that Rio Tinto will produce 353 million tonnes of iron ore in 2019, compared with the miner’s own guidance of 338 million to 350 million tonnes.

CORPORATES
RIO TINTO LIMITED – ASX RIO, UBS HOLDINGS PTY LTD, JP MORGAN AUSTRALIA LIMITED