IRON MINES AND MINING – WESTERN AUSTRALIA

End-year cyclone threat for miners, LNG producers

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Original article by Peter Ker
The Australian Financial Review – Page: 4 : 19-Dec-16

The Bureau of Meteorology has warned that there is the potential for a tropical cyclone to hit Western Australia’s north-west coast prior to Christmas. The bureau has advised iron ore and LNG producers to be alert for a possible cyclone, but stresses that it is too soon to predict whether this will occur. Cyclone Stan disrupted the Pilbara’s iron ore exports in January.

CORPORATES
AUSTRALIA. BUREAU OF METEOROLOGY, RIO TINTO LIMITED – ASX RIO, BHP BILLITON LIMITED – ASX BHP, FORTESCUE METALS GROUP LIMITED – ASX FMG, ROBE RIVER IRON ASSOCIATES, MITSUI AND COMPANY (AUSTRALIA) LIMITED, NIPPON STEEL AND SUMITOMO METAL CORPORATION

Forrest now third richest as iron ore rally delivers $5.3bn windfall

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Original article by Chris Kohler
The Australian – Page: 19 & 28 : 14-Dec-16

Bloomberg estimates that the net worth of Fortescue Metals Group founder Andrew Forrest has risen to $A7.34bn, making him the third-wealthiest individual in Australia. The 244 per cent rise in Fortescue’s share price during 2016 has boosted his wealth by $A5.34bn. The stock is currently trading at around $A6.43, compared with just $A1.45 in January. The iron ore price has risen by nearly 92 per cent in 2016, although BHP Billiton CEO Andrew Mackenzie is among those who believe that the recent rally is not sustainable.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, BLOOMBERG LP, BHP BILLITON LIMITED – ASX BHP, VISY INDUSTRIES AUSTRALIA PTY LTD, STANDARD AND POOR’S ASX 200 INDEX, RIO TINTO LIMITED – ASX RIO, MORGAN STANLEY AUSTRALIA LIMITED, GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD, BELL POTTER SECURITIES LIMITED, JP MORGAN AUSTRALIA LIMITED, MACQUARIE GROUP LIMITED – ASX MQG

PM’s GST floor to stem mine tax leakage: Grylls

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Original article by Andrew Burrell
The Australian – Page: 6 : 14-Dec-16

The Minerals Council of Australia has released a report which suggests that Western Australia would lose $A2.02bn worth of GST revenue if it increased the iron ore levy. However, WA National Party leader Brendon Grylls argues that this analysis excluded the impact of the Federal Government’s proposed "floor" for the distribution of GST revenue. The state would be likely to retain most of the proceeds of the levy, as its share of GST revenue has fallen well below the proposed floor of about $A0.70 in the dollar.

CORPORATES
MINERALS COUNCIL OF AUSTRALIA, NATIONAL PARTY OF AUSTRALIA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, LIBERAL PARTY OF WESTERN AUSTRALIA, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO

FMG can be ‘high growth, high yield’

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Original article by Peter Ker
The Australian Financial Review – Page: 18 : 9-Dec-16

Shares in Fortescue Metals Group have gained 23 per cent since Donald Trump won the US presidential election. The pure-play iron ore producer is now valued at around $A20bn, and the 33.32 per cent stake of founder and chairman Andrew Forrest is worth nearly $A7bn. Forrest has downplayed the potential for a trade war between the US and China, which would weigh on Fortescue’s share price. He has also rejected suggestions that mining companies cannot boast both high yields and high growth.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Fortescue steers past another milestone with iron ore carrier

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Original article by Angus Grigg
The Australian Financial Review – Page: 16 : 30-Nov-16

Pure-play iron ore miner Fortescue Metals Group has officially launched the first of eight bulk carriers that are being built in China. Each vessel’s capacity will be around 260,000 tonnes, and Fortescue CEO Nev Power says the investment in the fleet reflects the company’s confidence in the long-term outlook for the Chinese and Asian economies, as well as demand for iron ore. The price of the steel input has reached a two-year high, but Power expects it to trade at between $US50 and $US60 over the long-term.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, VALE SA, DEUTSCHE BANK AG

A fair return on WA’s iron ore would help our GST injustice

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Original article by Brendon Grylls
The Australian Financial Review – Page: 47 : 24-Nov-16

Western Australia now receives just $A0.30 of every dollar of goods and services tax revenue that is generated in the state. The proposed increase in the iron ore levy from $A0.25 per tonne to $A5 is intended to redress this imbalance and help reduce the state’s budget deficit. It should be noticed that the levy does not constitute a new tax on BHP Billiton and Rio Tinto. It has been in place for five decades and has remained unchanged since. The Samarco tailings dam disaster and the Simandou bribery scandal constitute greater sovereign risks.

CORPORATES
NATIONAL PARTY OF AUSTRALIA, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, AUSTRALIA. COMMONWEALTH GRANTS COMMISSION, VALE SA, SAMARCO MINERACAO SA, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, LIBERAL PARTY OF WESTERN AUSTRALIA

Fortescue in $US473m deal for ships funding

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Original article by Tess Ingram
The Australian Financial Review – Page: 20 : 15-Nov-16

Pure-play iron ore miner Fortescue Metals Group will finance its new fleet of bulk cargo vessels primarily via a $US473m loan from the China Development Bank Financial Leasing Company. Fortescue CEO Nev Power says it could potentially lead to more Chinese banks arranging structured financing deals in Australia. The fleet of eight very large ore carriers will cost $US556m in total, with delivery of the final one scheduled for mid-2018.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, CHINA DEVELOPMENT FINANCIAL LEASING COMPANY LIMITED, PATERSONS SECURITIES LIMITED

Chaney lashes WA Nats’ iron tax plan

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Original article by Paul Garvey, Eli Greenblat
The Australian – Page: 23 : 11-Nov-16

Wesfarmers chairman Michael Chaney has criticised a proposal by Western Australian National Party leader Brendon Grylls to increase the state’s iron ore levy. He argues that BHP Billiton and Rio Tinto already make a significant contribution to government revenue from taxes and mining royalties, and the existing arrangement for sharing GST revenue means WA’s income will not rise anyway. He adds that the levy increase would also result in job losses and reduced investment in WA, while Brazil would gain a greater share of iron ore exports at Australia’s expense.

CORPORATES
WESFARMERS LIMITED – ASX WES, NATIONAL PARTY OF AUSTRALIA, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, COLES SUPERMARKETS AUSTRALIA PTY LTD

Iron ore price hits Hancock profits

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Original article by Paul Garvey
The Australian – Page: 24 : 11-Nov-16

Hancock Prospecting has revealed that its revenue fell from more than $A2bn in 2014-15 to $A1.72bn in 2015-16, while its net profit from operations was 33 per cent lower at $A443m. Hancock Prospecting has attributed the revenue and earnings deficit to a fall in the iron ore prices during the financial year. The group also notes that construction of the Roy Hill iron project resulted in its total debt rising to $A8.9bn.

CORPORATES
HANCOCK PROSPECTING PTY LTD, ROY HILL IRON ORE PTY LTD, RIO TINTO LIMITED – ASX RIO, HOPE DOWNS IRON ORE PTY LTD

BHP urges suppliers to join tax fight

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Original article by Peter Ker
The Australian Financial Review – Page: 25 & 30 : 10-Nov-16

BHP Billiton executive Mike Henry has warned that mining services firms would be adversely affected by the Western Australian National Party’s proposed increase in the state’s iron ore levy. He says the mining services sector should lobby against the policy, arguing that they will receive less work if the levy is increased from $A0.25 per tonne to $A5, while employment in the sector will fall. Henry also says there should be greater collaboration between resources groups and mining services firms.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, NATIONAL PARTY OF AUSTRALIA, RIO TINTO LIMITED – ASX RIO, ORICA LIMITED – ASX ORI