B08 Metal Ore Mining

Iron ore discounts take toll on Atlas

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Original article by Paul Garvey
The Australian – Page: 20 : 19-Apr-17

Iron ore miner Atlas Iron achieved an average price of $A62 per tonne in the March 2017 quarter, which is well below the average benchmark index price for the period. The company was affected by rising Chinese demand for higher grade ore, which widened the gap between the benchmark price and the lower-grade ore produced by Atlas. Adverse weather conditions in the Pilbara also resulted in Atlas’s shipments falling to 3.2 million tonnes, down from four million tonnes for the same period in 2016.

CORPORATES
ATLAS IRON LIMITED – ASX AGO, FORTESCUE METALS GROUP LIMITED – ASX FMG, RIO TINTO LIMITED – ASX RIO, CITIGROUP PTY LTD, THE STEEL INDEX LIMITED

BHP lists ‘major flaws’ in Elliott’s restructure plan

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Original article by Paul Garvey
The Australian – Page: 19 & 32 : 13-Apr-17

BHP Billiton CEO Andrew Mackenzie says the resources group has examined the restructuring proposals put forward by Elliott Management and concluded that they do not make economic sense and are not in the interests of shareholders. BHP argues that scrapping the dual listing would be costly and would have no significant benefits, while it would be unlikely to gain regulatory approval in Australia. Mackenzie also says BHP has concluded that its mining and petroleum businesses are stronger as a single entity.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, ELLIOTT MANAGEMENT CORPORATION, MORGANS FINANCIAL LIMITED, AUSTRALIA. FOREIGN INVESTMENT REVIEW BOARD, AUSTRALIA. DEPT OF THE TREASURY

Rio’s deferral of bonus to Walsh ‘reasonable’

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Original article by Peter Ker
The Australian Financial Review – Page: 13 : 12-Apr-17

Proxy adviser ISS has backed Rio Tinto’s decision to delay paying bonuses to former CEO Sam Walsh until it completes an investigation into the Simandou payments scandal. The firm concluded that Rio’s action regarding Walsh’s short and long-term bonuses was "reasonable". However, ISS also noted that in contrast to Walsh, two Rio Tinto executives who were sacked over the iron ore scandal in Guinea will lose their bonuses completely, which will cost them about $A4m apiece.

CORPORATES
RIO TINTO LIMITED – ASX RIO, INSTITUTIONAL SHAREHOLDER SERVICES INCORPORATED, MOXICO RESOURCES PLC

BHP pressured on oil spin-off

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Original article by Paul Garvey
The Australian – Page: 17 & 22 : 11-Apr-17

BHP Billiton has rejected a restructuring proposal that has been put forward by US-based hedge fund Elliott Management, arguing that any potential benefits would be exceeded by the costs and risks associated with the plan. Elliott says BHP should abandon its dual-listed structure and demerge its US petroleum assets into a separately-listed company. Elliott believes that the restructuring proposal could boost the value of BHP shares by around 50 per cent.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, ELLIOTT MANAGEMENT CORPORATION, SOUTH32 LIMITED – ASX S32, QUINTIS LIMITED – ASX QIN, GLAUCUS RESEARCH GROUP CALIFORNIA LLC

Iron ore dives but stockpile declines

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Original article by Paul Garvey
The Australian – Page: 17 & 28 : 11-Apr-17

The spot price of iron ore for delivery to the port of Qingdao in China recently reached a low of $US75.45 per tonne, compared with a peak of $US94.86 in late February. However, China’s iron ore stockpiles have fallen by 1.1 million tonnes to 121 million tonnes since early April. The recent downturn in the spot price had been attributed to a sharp rise in Chinese stockpiles. Macquarie Group notes that demand for iron ore and steel will be boosted by the Chinese Government’s plans to develop the new Xiongan region.

CORPORATES
MACQUARIE GROUP LIMITED – ASX MQG, IRON ORE RESEARCH PTY LTD, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, COMMUNIST PARTY (CHINA)

Rio Tinto ramps up ATO battle with $3.8b report

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Original article by Peter Ker
The Australian Financial Review – Page: 15 : 10-Apr-17

Rio Tinto has released a report which shows that it paid $US2.89bn ($A3.85bn) in taxes to governments in Australia during 2016. This compares with $US3.3bn in 2015. The Federal Government received a total of $US1.39bn in tax payments from Rio Tinto in 2016. The resources giant is disputing the Australian Taxation Office’s ruling that it must pay an additional $A447 million in taxes. The ruling is associated with Rio Tinto’s use of a marketing hub in Singapore. Rio’s global tax bill totalled $US3.98bn in 2016.

CORPORATES
RIO TINTO LIMITED – ASX RIO, AUSTRALIAN TAXATION OFFICE, NATIONAL PARTY OF AUSTRALIA

Strike delays copper mine projects: BHP

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Original article by Peter Ker
The Australian Financial Review – Page: 13 & 25 : 6-Apr-17

BHP Billiton executive Daniel Malchuk has advised that a recent 44-day strike at the Escondida copper mine in Chile will postpone completion of a new concentrator and a desalination plant at the mine. Both projects had been slated for completion by June 2017, and the delay could impact on the mine’s output for the 2017-18 financial year. Malchuk has also indicated that production has resumed at Escondida, although it is not yet back to full capacity. He is optimistic that the dispute over a new pay deal at Escondida can be resolved.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, MINERA ESCONDIDA LIMITADA, RIO TINTO LIMITED – ASX RIO, MITSUBISHI CORPORATION, NIPPON MINING AND METALS COMPANY LIMITED, FREEPORT-McMORAN COPPER AND GOLD INCORPORATED, MMG LIMITED – ASX MMG, OZ MINERALS LIMITED – ASX OZL

Iron ore price begins slow descent to ‘normal’

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Original article by Tess Ingram, Lisa Murray
The Australian Financial Review – Page: 17 & 28 : 24-Mar-17

The spot price of iron ore in China has fallen by 7.7 per cent in two days, reaching a low of $US84.99 per tonne. SteelHome’s Du Hongfeng has attributed the fall to a downturn in the price of construction steel in China, which has in turn been prompted by moves by some Chinese cities to introduce stricter regulations for property speculators. Vivek Dhar of the Commonwealth Bank anticipates a "gradual" decline in the iron ore price, forecasting that it will fall to around $US60/tonne by the end of 2017.

CORPORATES
STEELHOME, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, UBS HOLDINGS PTY LTD, CITIC LIMITED, BHP BILLITON LIMITED – ASX BHP

Port Hedland’s iron spirit surfaces again

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Original article by Paul Garvey
The Australian – Page: 19 & 22 : 21-Mar-17

Housing rent charges in Port Hedland rose by $A10 per week in the December 2016 quarter, according to data from the Pilbara Development Commission. It was the first quarterly rise in rents since 2012, and reflects the recent rebound in the iron ore price. The average advertised sale price of homes in Port Hedland rose for the first time since 2013. The average rent in Port Hedland is now $A506 per week, compared with nearly $A2,600 at the height of the mining boom. The iron ore price has reached a peak of more $US90 per tonne, but many forecasters do not expect this to be sustained.

CORPORATES
PILBARA DEVELOPMENT COMMISSION, EVANS AND PARTNERS PTY LTD, WESTERN AUSTRALIA. DEPT OF TREASURY AND FINANCE, RIO TINTO LIMITED – ASX RIO, BHP BILLITON LIMITED – ASX BHP, FORTESCUE METALS GROUP LIMITED – ASX FMG, FIRST NATIONAL REAL ESTATE GROUP

Fears grow of pullback in iron ore prices

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Original article by Paul Garvey
The Australian – Page: 22 : 8-Mar-17

Australian iron ore miners’ earnings have been boosted by the recent spike in the price of the steel input to more than $US90 per tonne, but Evans & Partners analyst Andrew Hines warns that the rally is not sustainable. He forecasts that the iron ore price will fall from its current level to around $US45 in the second half of 2017, which will in turn hit the profits and share prices of BHP Billiton, Rio Tinto and Fortescue Metals Group. Credit Suisse and UBS recently upgraded their iron ore price forecasts for 2017.

CORPORATES
EVANS AND PARTNERS PTY LTD, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, CREDIT SUISSE (AUSTRALIA) LIMITED, UBS HOLDINGS PTY LTD, ATLAS IRON LIMITED – ASX AGO, VEDANTA RESOURCES PLC, MOUNT GIBSON IRON LIMITED – ASX MGX