CAPITAL INVESTMENTS – AUSTRALIA

BHP holds out against activist push

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Original article by Nick Evans
The Australian – Page: 17 & 20 : 18-Oct-19

BHP CEO Andrew Mackenzie has defended its membership of mining industry groups such as the Minerals Council of Australia and associated entities like Coal 21, amid growing pressure from activist groups and shareholders. Meanwhile, BHP has advised that scheduled maintenance work at Port Hedland resulted in its Pilbara iron ore production falling three per cent to 69 million tonnes in the September quarter. BHP has also approved additional expenditure of $US344m on the Jansen potash project in Canada, ahead of a final investment decision in February 2021.

CORPORATES
BHP GROUP LIMITED – ASX BHP, MINERALS COUNCIL OF AUSTRALIA, COAL 21

Business cash flow tax would lift investment

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Original article by John Kehoe
The Australian Financial Review – Page: 9 : 3-Sep-19

Economist Ross Garnaut has called on the federal government to adopt a business cash flow tax that would incorporate a full deduction for corporate expenditure. He says a full tax write-off for business expenditure provides a significant incentive for investment, and is in line with Treasurer Josh Frydenberg’s recent call for companies to boost productivity by increasing capital investment in preference to share buybacks and special dividends. Garnaut and former federal Labor minister Craig Emerson have undertaken economic modelling on a possible switch from the traditional profit-based company tax to a tax based on cash flow.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, BHP GROUP LIMITED – ASX BHP

Miners weigh lowering hurdle on projects

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Original article by Peter Ker
The Australian Financial Review – Page: 18 : 2-Sep-19

Alumina CEO Mike Ferraro says mining companies should not be rigid about the rate of return they expect from an investment. A rate of return of 15 per cent has become the minimum requirement for most large mining corporations when deciding whether to proceed with a project, but there are signs that some are prepared to go below this rate of return due to very low interest rates. Newcrest Mining CEO Sandeep Biswas says he would be more willing to accept lower rates of return on new projects than on expansions of existing ones.

CORPORATES
ALUMINA LIMITED – ASX AWC, NEWCREST MINING LIMITED – ASX NCM, OZ MINERALS LIMITED – ASX OZL, FORTESCUE METALS GROUP LIMITED – ASX FMG, BHP GROUP LIMITED – ASX BHP

Investment outlook clouded by global risks

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Original article by David Rogers
The Australian – Page: 25 : 30-Aug-19

Marcel Thieliant of Capital Economics expects the upcoming national accounts data to show that the Australian economy grew by just 0.2 per cent in the June quarter. This follows the release of data showing an 0.5 per cent decline in private new capital expenditure during the quarter; financial markets had anticipated an increase of 0.4 per cent. However, there has been a 16.7 per rise in capital expenditure intentions for 2019-20, with capex estimates in the mining sector revised upwards by 17.7 per cent.

CORPORATES
CAPITAL ECONOMICS LIMITED, UBS HOLDINGS PTY LTD, WESTPAC BANKING CORPORATION – ASX WBC, AMP CAPITAL INVESTORS LIMITED, AUSTRALIA. DEPT OF THE TREASURY, BUSINESS COUNCIL OF AUSTRALIA, RESERVE BANK OF AUSTRALIA

Grow business or be swamped: SEEK boss

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Original article by Damon Kitney, Joyce Moullakis
The Australian – Page: 2 : 29-Aug-19

SEEK CEO Andrew Bassat­ and Macquarie Group CEO Shemara Wikramanayak have backed a recent call by Treasurer Josh Frydenberg for Australian companies to lift productivity by reinvesting in their business rather than returning capital to shareholders. Bassat says Australian companies will be less competitive internationally if their level of capital investment continues to lag that of their global peers. However, Boral CEO Mike Kane is amongst the business leaders who have rejected Frydenberg’s comments.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, SEEK LIMITED – ASX SEK, MACQUARIE GROUP LIMITED – ASX MQG, BORAL LIMITED – ASX BLD, FORTESCUE METALS GROUP LIMITED – ASX FMG

Cut taxes, not rates, says Comyn

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Original article by Joyce Moullakis
The Australian – Page: 20 : 29-May-19

The Commonwealth Bank plans to invest some $5bn in it technology platforms over five years, to make them more secure and to improve their functionality. It is part of the bank’s strategy to regain customers’ trust in the wake of the Hayne royal commission. CEO Matt Comyn has also told a business lunch that the bank will close more branches over coming years but it is committed to retaining Australia’s largest branch network. He added that government policies such as tax cuts do more to stimulate the economy than official interest rate cuts.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, RESERVE BANK OF AUSTRALIA, HERBERT SMITH FREEHILLS PTY LTD

Fortescue approves $417m Queens mine as analysts tip dividend top-up

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Original article by Paul Garvey
The Australian – Page: 20 : 23-May-19

Pure-play iron ore producer Fortescue Metals Group will develop the Queens Valley mine in the Pilbara, with the project slated to cost $US287m ($417m). Paul Hissey of RBC Capital Markets says the recent rise in the iron ore price could significantly boost Fortescue’s earnings in the June quarter. This could in turn prompt another dividend payout when Fortescue releases its full-year results.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, RBC CAPITAL MARKETS

Rare earths dispute lifts Lynas

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Original article by Paul Garvey
The Australian – Page: 20 : 22-May-19

Lynas Corporation produced 5,444 tonnes of neodymium and praseodymium in fiscal 2018, but it has outlined plans to lift this to 10,500 tonnes a year via a $500m capital investment program. Lynas has also advised that it will undertake the initial processing of ore from its Mt Weld project in Western Australia at a site near the mine, rather than exporting the raw materials to its processing plant in Malaysia. Meanwhile, Lynas share closed 14.4 per cent higher at $2.26 on 21 May, after China flagged plans to cease exporting rare earths to the US amid ongoing trade tensions between the two nations.

CORPORATES
LYNAS CORPORATION LIMITED – ASX LYC, WESFARMERS LIMITED – ASX WES

Rio fast-tracks copper in hunt for growth

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Original article by Nick Evans
The Australian – Page: 20 : 2-May-19

Resources group Rio Tinto has signalled that it will ramp up its capital investment in coming years. Rio executive Stephen McIntosh has told a conference that its capital expenditure has risen above depreciation levels again, after falling in 2016 following the completion of iron ore expansion projects. McIntosh says a priority for Rio Tinto will be to determine the extent of the copper resources at its Winu discovery in Western Australia.

CORPORATES
RIO TINTO LIMITED – ASX RIO, ALUMINIUM CORPORATION OF CHINA LIMITED

Labor tax breaks not enough

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Original article by John Kehoe
The Australian Financial Review – Page: 8 : 18-Mar-19

Canadian economist Jack Mintz has produced a report on behalf of the Minerals Council of Australia. He concludes that reducing the company tax rate from 30 per cent to 25 per cent would do more to ensure that the nation remains internationally competitive than Labor’s proposal to provide businesses with a 20 per cent tax write-off for capital expenditure exceeding $20,000. The report also argues that the manufacturing sector would gain more benefit from Labor’s policy than industries such as mining.

CORPORATES
MINERALS COUNCIL OF AUSTRALIA, AUSTRALIAN LABOR PARTY