IRON MINES AND MINING – WESTERN AUSTRALIA

Trains give Rio’s iron ore unit a push

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Original article by James Thomson
The Australian Financial Review – Page: 15 : 19-Apr-18

Rio Tinto has advised that its Pilbara iron ore shipments totalled 80.3 million tonnes in the March 2018 quarter, which is 11 per cent lower than the December quarter but five per cent higher year-on-year. The resources group still expects shipments for the full year to be within the range of 330 million and 340 million tonnes. Rio Tinto has also advised that it expects the AutoHaul autonomous train project to be completed in 2018, and says the proportion of trains that are operating in autonomous mode rose from 60 per cent to 65 per during the quarter.

CORPORATES
RIO TINTO LIMITED – ASX RIO, BHP BILLITON LIMITED – ASX BHP, ROYAL BANK OF CANADA, QUEENSLAND ALUMINA LIMITED, RUSAL

Atlas facing wipe-out: MinRes

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Original article by Paul Garvey
The Australian – Page: 19 : 12-Apr-18

About 15,000 of Atlas Iron’s shareholders own less than $A500 worth of shares in the iron ore producer, with 4,900 owning less than $A20 worth of shares. Mineral Resources CEO Chris Ellison has urged investors with small shareholdings to support his company’s $A280m takeover bid, warning that they will be left with worthless stock if Atlas collapses. He has questioned whether Atlas can survive if the takeover deal does not proceed.

CORPORATES
ATLAS IRON LIMITED – ASX AGO, MINERAL RESOURCES LIMITED – ASX MIN

Ore discounts force Atlas, MinRes link-up

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Original article by James Thomson, Sarah Thompson, Anthony Macdonald
The Australian Financial Review – Page: 11 & 16 : 10-Apr-18

Atlas Iron’s directors have endorsed a proposed merger with Mineral Resources, which requires the support of at least 75 per cent of Atlas shareholders. The deal values Atlas shares at $A0.0302, with stockholders to receive one Mineral Resources share for every 571 shares they hold. Atlas CEO Cliff Lawrenson has praised Mineral Resources, and he attributes the merger to the widening discount between lower-grade iron ore and the benchmark price. He says it is uncertain whether the discount is structural or cyclical.

CORPORATES
ATLAS IRON LIMITED – ASX AGO, MINERAL RESOURCES LIMITED – ASX MIN, FORTESCUE METALS GROUP LIMITED – ASX FMG, AWE LIMITED – ASX AWE, MITSUI AND COMPANY LIMITED, HOULIHAN LOKEY HOWARD AND ZUKIN, DLA PIPER, GILBERT AND TOBIN LAWYERS

BHP content with iron ore grade boost for now

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Original article by Peter Ker
The Australian Financial Review – Page: 19 : 22-Mar-18

BHP Billiton is tipped to make an investment decision on the South Flank iron ore project in Western Australia by mid-2018. The company’s average iron ore grade is 61 per cent at present, but this would rise to 62 per cent if the project is approved. However, BHP’s Edgar Basto says that aside from South Flank, BHP is unlikely to increase its average iron ore grades in the near-term. He adds that factors such as the stronger Australian dollar and rising labour costs have contributed to an increase in the expected cost of the project.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, VALE SA

Another billion-dollar blow adds to woes for Sino Iron project

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Original article by Brad Thompson
The Australian Financial Review – Page: 20 : 13-Mar-18

China-based CITIC has advised of another massive write-down in the value of its Sino Iron magnetite project in Western Australia. The latest write-down is expected to around $US1bn ($A1.27bn), similar to other write-downs in recent years. Sino Iron has been plagued by a legal dispute, which prompted CITIC to warn in 2017 that it could put production on hold. The closure of Sino Iron could affect Fortescue Metal Group’s decision on whether to proceed with its Iron Bridge magnetite project.

CORPORATES
CITIC LIMITED, MINERALOGY PTY LTD, FORTESCUE METALS GROUP LIMITED – ASX FMG, FORMOSA PLASTICS GROUP, SHANGHAI BAOSTEEL GROUP CORPORATION, GINDALBIE METALS LIMITED – ASX GBG, ANSHAN IRON AND STEEL COMPANY, SUPREME COURT OF WESTERN AUSTRALIA

Rio iron ore mines shielded from potential US tariffs

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Original article by Brad Thompson
The Australian Financial Review – Page: 17 : 8-Mar-18

Rio Tinto has advised that the automation of its haulage trucks will result in the loss of 200 jobs at its Brockman 4 and Marandoo iron ore mines in the Pilbara. The technology will also be rolled out at the West Angelas mine. Chris Salisbury, the CEO of Rio Tinto’s iron ore division, says 25 per cent of the company’s fleet has been automated to date. He adds that the steel tariff policy of President Donald Trump is unlikely to affect demand for iron ore from the Pilbara, as a small proportion of the steel output of Rio Tinto’s Asian customers is exported to the US.

CORPORATES
RIO TINTO LIMITED – ASX RIO, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Discounts put $1b hole in Fortescue’s earnings

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Original article by Peter Ker
The Australian Financial Review – Page: 17 : 22-Feb-18

Fortescue Metals Group has posted a 2017-18 interim net profit of $US681m. It is 44 per cent lower than previously but exceeded analysts’ expectations. Fortescue’s received prices for iron ore fell by 15 per cent over the period, and the widening gap between lower-grade ore and the price of benchmark ore reduced its underlying EBITDA by $US734m. Shareholders will receive an interim dividend of $A0.11 per share, compared with analysts’ forecasts for a payout of $A0.14 per share.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, BHP BILLITON LIMITED – ASX BHP, SHAW AND PARTNERS LIMITED

Power departs a job well done

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Original article by Paul Garvey
The Australian – Page: 19 : 16-Feb-18

Fortescue Metals Group has slashed its gross debt and ramped up iron ore production since Nev Power became CEO in mid-2011. Production costs have also been reduced from an average of $US53.23 per tonne to $US12.08. Power will step down as CEO on 16 February, and he has flagged the likelihood of taking on a number of directorships in his post-Fortescue career. However, Power doubts that he will accept another full-time executive position, and he has ruled out a career in politics.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, CREDIT SUISSE AG, JP MORGAN AND COMPANY INCORPORATED, BANK OF AMERICA CORPORATION, DEUTSCHE BANK AG, ANGLO AMERICAN PLC

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