B08 Metal Ore Mining

Rival MinRES contradicts FMG on iron discounts

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Original article by Peter Ker
The Australian Financial Review – Page: 14 : 1-Feb-18

Mineral Resources has advised that it stockpiled about 500,000 tonnes of iron ore fines during the December 2017 quarter, in response to the ongoing price discount for lower-grade ore. In contrast to Fortescue Metals Group, Mineral Resources expects the price discount to be sustained for some time. Mineral Resources also sought to counter the price discount by changing its iron ore blend in a bid to deliver supply buyers with a higher-quality product. Fortescue also intends to increase the average grade of its iron ore.

CORPORATES
MINERAL RESOURCES LIMITED – ASX MIN, FORTESCUE METALS GROUP LIMITED – ASX FMG, INDEPENDENCE GROUP NL – ASX IGO

Cycle turning on discounts, says Fortescue

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Original article by Peter Ker
The Australian Financial Review – Page: 17 : 31-Jan-18

Fortescue Metals Group CEO Nev Power expects the price gap between lower-grade iron ore and the benchmark price to narrow in coming months. He says the December 2017 quarter is likely to represent the low-point for the price discount. Fortescue sold its iron ore at just 66 per cent of the benchmark price during the quarter, compared with 86-88 per cent between 2014 and 2016. Meanwhile, Citigroup has forecast that Fortescue will reduce its net debt to $US2.4bn by mid-2018, after it rose to $US3.3bn at the end of 2017.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, CITIGROUP PTY LTD, SHAW AND PARTNERS LIMITED, CLEVELAND-CLIFFS INCORPORATED, RIO TINTO LIMITED – ASX RIO, VALE SA

Atlas irons out a profit problem

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Original article by Paul Garvey
The Australian – Page: 19 : 30-Jan-18

Shares in Atlas Iron shed more than 16 per cent to close at $A0.026 on 29 January, after the iron ore miner advised that its Pilbara operations posted a cash loss of $A1.2m during the December 2017 quarter. Atlas Iron’s net cash position fell to $A104m at the end of the quarter, amid a sharp rise in the price discount for lower-grade iron ore. CEO Cliff Lawrenson says Atlas Iron’s daily operations are making money despite the price discount. He adds that the expected closure of Cliffs’ Koolyanobbing iron ore mine later in 2018 could create new supply opportunities for Atlas.

CORPORATES
ATLAS IRON LIMITED – ASX AGO, CLEVELAND-CLIFFS INCORPORATED, PILBARA MINERALS LIMITED – ASX PLS, FORTESCUE METALS GROUP LIMITED – ASX FMG

Steel mills put the sizzle back into Fortescue

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Original article by Peter Ker
The Australian Financial Review – Page: 17 : 29-Jan-18

The price discount between benchmark iron ore and lower-grade iron ore has widened in recent months, amid the Chinese Government’s push to reduce air pollution. However, Fortescue Metals Group CEO Nev Power believes that the price gap is not sustainable. A strong rise in steel prices contributed to the increase in the price discount, although the price of lower-grade iron ore has risen more strongly than the price of ores with 62 per cent iron content since early December. This has coincided with a seven per cent fall in steel prices.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, WHITEHAVEN COAL LIMITED – ASX WHC, RIO TINTO LIMITED – ASX RIO, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Kingsgate activist opts to reduce its holding

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Original article by Peter Ker
The Australian Financial Review – Page: 13 : 24-Jan-18

UK-based Metal Tiger has sold about 5.5 million shares in gold miner Kingsgate Consolidated in the wake of its failed bid for a board spill. The divestment has reduced Metal Tiger’s stake from 8.1 per cent to 5.6 per cent, and CEO Michael McNeilly stresses that the company will continue to be an active investor. Meanwhile, Kingsgate chairman Ross Smyth-Kirk has ruled out boardroom changes in the near-term. The company is pursuing legal action against the Thai Government over its closure of the Chatree mine.

CORPORATES
KINGSGATE CONSOLIDATED LIMITED – ASX KCN, METAL TIGER PLC

Miners lead confidence surge

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Original article by Matt Chambers, Sarah-Jane Tasker
The Australian – Page: 15 & 21 : 24-Jan-18

The latest Mining Business Outlook survey by Newport Consulting shows that mining company executives are upbeat about the outlook for commodity prices in 2018. The survey found that 75 per cent of respondents are "cautiously optimistic" and 17 per cent are "very optimistic" about the outlook. Meanwhile, 42 per cent of respondents expect to "moderately" increase spending in 2018, and about 25 per cent intend to hire additional staff. CEOs in the manufacturing, construction and services industries are also positive about the outlook in 2018, according to a separate survey by the Australian Industry Group.

CORPORATES
NEWPORT CONSULTING PTY LTD, THE AUSTRALIAN INDUSTRY GROUP, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, DEUTSCHE BANK AG, RESMED INCORPORATED – ASX RMD, MACQUARIE BANK LIMITED – ASX MBL, RESERVE BANK OF AUSTRALIA, ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, INTERNATIONAL MONETARY FUND

Rio speeds up plan for driverless ore trains

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Original article by Matt Chambers
The Australian – Page: 15 & 24 : 23-Jan-18

Rio Tinto’s AutoHaul project to fully automate its iron ore trains in the Pilbara is slated for completion by the end of 2018. The project was first mooted in 2008 and it was initially expected to be completed in 2015, while it is likely to cost significantly more than the $US518m that had originally been budgeted. However, Rio Tinto expects the move to driverless trains will allow it to ship an additional 20 million tonnes of iron ore each year, which will in turn significantly increase its profits.

CORPORATES
RIO TINTO LIMITED – ASX RIO

Coking coal headaches prompt BHP to cut production guidance

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Original article by Matt Chambers
The Australian – Page: 15 & 16 : 19-Jan-18

BHP Billiton has advised that its overall production for 2017-18 is expected to be six per cent higher than previously. It had forecast seven per cent growth in production in October. Meanwhile, BHP’s coking coal production fell by eight per cent during the second quarter, to 10 million tonnes, but its iron ore output in the Pilbara increased by 11 per cent to a record 72 million tonnes. BHP will report its half-year results in February, with analysts expecting a underlying interim net profit of $US4.5bn ($5.6bn), compared with $US3.2bn previously.

CORPORATES
BHP BILLITON LIMITED – ASX BHP

OZ looks to build on copper’s solid foundation

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Original article by Paul Garvey
The Australian – Page: 15 : 18-Jan-18

OZ Minerals expects copper production at its Prominent Hill mine in South Australia to be within the range of 100,000 to 110,000 tonnes in 2018, and 95,000 to 105,000 tonnes in 2019. Its previous guidance was for output of 90,000 to 100,000 tonnes in both years. Copper production at Prominent Hill totalled 112,008 tonnes in 2017, at an average cash cost of $US0.83 per pound. Meanwhile, OZ will invest some $A500m on development of its Carrapateena copper mine in 2018, while it has allocated at least $A38m to an exploration program in South Australia.

CORPORATES
OZ MINERALS LIMITED – ASX OZL

Cyclone Joyce drenches Pilbara as Port Hedland resumes exports

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Original article by Peter Ker
The Australian Financial Review – Page: 18 : 15-Jan-18

Tropical Cyclone Joyce forced the closure of Port Hedland for about 43 hours, although it is not expected to have much impact on iron ore export volumes. The cyclone resulted in heavy rains near iron ore mines operated by BHP Billiton, Rio Tinto and Fortescue Metals Group in the Pilbara region, with 132 millimetres of rain recorded at Barimunya over four days and 102 millimetres recorded at Solomon Airport. Meanwhile, some 105 millimetres of rain fell at Marble Bar in a 24-hour period.

CORPORATES
PORT OF PORT HEDLAND, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, NEWCREST MINING LIMITED – ASX NCM, AUSTRALIA. BUREAU OF METEOROLOGY, DEUTSCHE BANK AG