B08 Metal Ore Mining

Electric cars drive Fortescue’s lithium push

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Original article by Matt Chambers
The Australian – Page: 17 & 25 : 1-Nov-17

Growing global demand for lithium has prompted pure-play iron ore miner Fortescue Metals Group to diversify by revealing plans to explore tenements near existing lithium deposits in Western Australia. Shares in Australian-listed lithium miners have rallied in recent months, amid rising demand for electric cars and plans by some car makers to phase out traditional petrol-only vehicles. Meanwhile, Richard Coppleson of Bell Potter says lithium could follow the same price trajectory as iron ore in the mid-2000s.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, BELL POTTER SECURITIES LIMITED, PILBARA MINERALS LIMITED – ASX PLS, GALAXY RESOURCES LIMITED – ASX GXY, KIDMAN RESOURCES LIMITED – ASX KDR, MINERAL RESOURCES LIMITED – ASX MIN, UBS HOLDINGS PTY LTD, VOLKSWAGEN AG, AUDI AG, DR ING HCF PORSCHE AG, GENERAL MOTORS CORPORATION, FORD MOTOR COMPANY

Cashed-up miners are facing a global grab for royalties

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Original article by Peter Ker
The Australian Financial Review – Page: 19 : 31-Oct-17

A congressional committee recently approved the Brazilian Government’s proposal to increase the nation’s iron ore royalty rate from two per cent to four per cent. Vale has advocated increasing the royalty via a sliding scale, warning that a fixed rise could force it to reduce production at some mines. Chile in turn proposes a hike in its lithium royalty rate. Meanwhile, Lion Selection Group’s Hedley Widdup notes that mining companies would have reduced their exploration budgets if the Western Australian Government’s push to increase its gold royalty had succeeded.

CORPORATES
VALE SA, LION SELECTION GROUP LIMITED – ASX LSX, UBS HOLDINGS PTY LTD, AUSTRALIA. OFFICE OF THE CHIEF ECONOMIST

Pollution controls lift FMG’s China discount

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Original article by Angus Grigg, James Thomson
The Australian Financial Review – Page: 13 & 19 : 31-Oct-17

SteelHome analyst Du Hongfeng says Chinese demand for iron ore is likely to fall by 56 million tonnes between September 2017 and March 2018, as steel mills reduce output during the winter months. He adds that this will require Fortescue Metals Group to maintain its current iron ore price discount until at least March, in order to retain its market share. Fortescue’s iron ore with 58.5 per cent iron content is currently being offered at a 23 per cent discount to the benchmark price for delivery in November, while its iron ore with 56.3 per cent iron content is trading at a 40 per cent discount.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, SHANGHAI STEELHOME INFORMATION TECHNOLOGY COMPANY LIMITED, UBS HOLDINGS PTY LTD

Newcrest ramps up Cadia mine’s output

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Original article by Peter Ker
The Australian Financial Review – Page: 22 : 27-Oct-17

Newcrest Mining’s gold production for the September quarter was slightly below analysts’ forecasts, at 522,917 ounces. However, Newcrest had flagged lower output for the quarter due to maintenance work at its Lihir mine in Papua New Guinea. Newcrest has also advised that it has resumed production at both caves at the Telfer mine, where mining was disrupted by a "seismic event" in April. The company expects to have access to all parts of the mine by the end of 2017.

CORPORATES
NEWCREST MINING LIMITED – ASX NCM, RBC CAPITAL MARKETS

Fortescue adamant that wide iron ore discount will revert

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Original article by Tess Ingram
The Australian Financial Review – Page: 17 : 27-Oct-17

Fortescue Metals Group’s cash reserves rose from $US1.8bn to $US2.3bn in the September quarter. Iron ore shipments totalled 44 million tonnes, with "C1" costs falling marginally to $US12.15 per tonne. Fortescue has reduced its price realisation guidance for the second time in 2017-18, and now expects to receive between 70 and 75 per cent of the benchmark index price for its lower-grade ore. CEO Nev Power suggested earlier in 2017 that the price discount would not be sustained, but he now says it is difficult to predict when it will narrow.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, MACQUARIE GROUP LIMITED – ASX MQG

BHP to take hard look at asset sales

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Original article by Matt Chambers
The Australian – Page: 21 : 26-Oct-17

BHP Billiton may consider further asset sales under CEO Andrew Mackenzie and chairman Ken MacKenzie. BHP has previously flagged plans to divest its US shale assets, and other assets that could potentially be sold include its one-sixth stake in the North West Shelf LNG project, thermal coal mines, nickel mines in Western Australia and its potash project in Canada. The North West Shelf project was the biggest contributor to the earnings of BHP’s petroleum division in 2016.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, WOODSIDE PETROLEUM LIMITED – ASX WPL, RIO TINTO LIMITED – ASX RIO, YANCOAL AUSTRALIA LIMITED – ASX YAL, ELLIOTT MANAGEMENT CORPORATION

Chinese entrench iron ore discount

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Original article by Paul Garvey
The Australian – Page: 20 : 24-Oct-17

The price discount between iron ore with 62 per cent content and lower-grade ore has traditionally been within the range of 10-15 per cent, although it has widened significantly in 2017. Chris Salisbury, the head of Rio Tinto’s iron ore division, says China’s decision to curb steel production during winter should not affect demand for Rio’s higher-grade iron ore. He adds that this in turn will ensure that the price discount will be sustained. Salisbury also says the widening discount appears to be structural.

CORPORATES
RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, ATLAS IRON LIMITED – ASX AGO, UBS HOLDINGS PTY LTD, TAFE WESTERN AUSTRALIA

‘Foundations are strong’, says new BHP chairman

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Original article by Darren Gray
The Sydney Morning Herald – Page: Online : 20-Oct-17

Former Amcor CEO Ken MacKenzie addressed BHP Billiton’s AGM in London for the first time in his new role of chairman. He told shareholders that there are some areas in which BHP can increase its focus and improve its operations, but overall the company is very strong. MacKenzie also said BHP is actively seeking to improve its capital allocation processes, noting that this has been somewhat lacking over the last decade.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, ELLIOTT MANAGEMENT CORPORATION, AMCOR LIMITED – ASX AMC

BHP guidance for iron ore unchanged

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Original article by Timothy Moore, James Thomson
The Australian Financial Review – Page: 15 : 19-Oct-17

BHP Billiton has advised that it produced 64 million tonnes of iron ore in the September 2017 quarter, which is four per cent lower than the same period in 2016. However, BHP still expects iron ore production to be within the range of 275 and 280 million for 2017-18. Meanwhile, copper production rose by 14 per cent to 404,000 tonnes during the quarter, while petroleum production was down eight per cent to 50 million barrels of oil equivalent.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, RBC CAPITAL MARKETS, ELLIOTT MANAGEMENT CORPORATION

Rio sticks with record iron ore target

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Original article by Peter Ker
The Australian Financial Review – Page: 13 : 18-Oct-17

Rio Tinto scaled back its forecast for Pilbara iron ore shipments in 2017 to 330 million tonnes earlier in the year. The resources group is confident of meeting this guidance, after shipments rose by 11 per cent to 85.8 million tonnes in the September quarter. However, Rio Tinto’s export volumes will have to rise to a record 89.8 tonnes in the December quarter to achieve its revised guidance. Meanwhile, Rio Tinto has reduced its forecast for copper production in 2017 for a second time. It now expects global output to be within the range of 460,000 to 480,000 tonnes.

CORPORATES
RIO TINTO LIMITED – ASX RIO, BHP BILLITON LIMITED – ASX BHP, YANCOAL AUSTRALIA LIMITED – ASX YAL, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, SHAW AND PARTNERS LIMITED, DEUTSCHE BANK AG