IRON MINES AND MINING – WESTERN AUSTRALIA

BHP, Rio spurn WA plan for upfront tax

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Original article by Tess Ingram, Julie-anne Sprague
The Australian Financial Review – Page: 3 : 5-Oct-16

Western Australian Premier Colin Barnett has again ruled out adopting a WA National Party proposal to increase the iron ore levy on BHP Billiton and Rio Tinto from $A0.25 per tonne to $A5. However, Treasurer Mike Nahan has described the levy as an anomaly, and he has held discussions with BHP and Rio regarding alternatives such as an upfront lump-sum payment. Both companies have indicated that they would not support an upfront payment.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, WESTERN AUSTRALIA. DEPT OF THE PREMIER AND CABINET, WESTERN AUSTRALIA. DEPT OF TREASURY AND FINANCE, NATIONAL PARTY OF AUSTRALIA, FORTESCUE METALS GROUP LIMITED – ASX FMG, HANCOCK PROSPECTING PTY LTD, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF INDUSTRY, INNOVATION AND SCIENCE, REACHTEL PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG

BHP’s Henry slams Grylls over mining tax plan

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Original article by Julie-anne Sprague
The Australian Financial Review – Page: 12 : 23-Sep-16

It is estimated that the iron ore levy proposed by Western Australian National Party leader Brendon Grylls would raise about $A1.5bn each year. Grylls wants to increase the state levy from $A0.25 per tonne to $A5. BHP Billiton executive Mike Henry argues that the resources giant already pays a levy of about $A5 per tonne, adding that it paid total taxes of around $A17.50 for each tonne of iron ore it produced in 2015. Henry warns that capital investment and dividends would be affected by Grylls’ proposal.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, NATIONAL PARTY OF AUSTRALIA, LIBERAL PARTY OF WESTERN AUSTRALIA, REACHTEL PTY LTD, AUSTRALIAN TAXATION OFFICE

Big gains from small Pilbara changes

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Original article by Tess Ingram
The Australian Financial Review – Page: 16 : 19-Sep-16

The Gina Rinehart-backed Roy Hill iron ore project shipped its first iron ore from the Pilbara in late 2015. The use of technology is a key feature of the $A10bn project. Amongst other things, it uses drones to undertake surveying work, and it is trialling automated truck refuelling technology. BHP Billiton and Rio Tinto have deployed driverless trucks at their Pilbara mines, but Roy Hill Holdings Barry Fitzgerald says the company does not think the technology has a sufficient cost benefit.

CORPORATES
ROY HILL HOLDINGS PTY LTD, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, WOODSIDE PETROLEUM LIMITED – ASX WPL

FMG closer to investment grade rating

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Original article by Peter Ker
The Australian Financial Review – Page: 15 : 14-Sep-16

Pure-play iron ore producer Fortescue Metals Group will repay $US700m ($A925m) worth of debt that is scheduled to mature in 2019. This will cut its debt obligations for 2019 to just $US2.88bn. Fortescue repaid $US2.9bn of debt in 2015-16, and the latest move will reduce its interest costs by $US26 a year. Peter O’Connor of Shaw & Partners expects Fortescue to further reduce its debt in the current financial year. Fortescue’s credit rating remains below investment grade, and Matthew Moore of Moody’s has ruled out a re-rating at present.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, SHAW AND PARTNERS LIMITED, MOODY’S INVESTORS SERVICE INCORPORATED, STANDARD AND POOR’S CORPORATION, RBC CAPITAL MARKETS

Miners lash Joyce’s ore comments

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Original article by James Thomson
The Australian Financial Review – Page: 15 : 12-Sep-16

Minerals Council of Australia CEO Brendan Pearson has described a proposed levy on iron ore production in Western Australia as a "bad idea" that will adversely affect both the sector and suppliers. Federal National Party leader Barnaby Joyce has been criticised after saying that he understood the motivations for state counterpart Brendon Grylls in proposing that the iron ore levy paid by BHP Billiton and Rio Tinto be increased from $A0.25 per tonne to $A5.

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

Doubts on Fortescue dividends

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Original article by Peter Ker
The Australian Financial Review – Page: 15 : 24-Aug-16

Analysts are divided regarding Fortescue Metals Group’s dividends in coming years, after the pure-play iron ore miner announced a total payout of $A0.15 per share for 2015-16. Paul McTaggart of Credit Suisse expects the total dividend to rise to $A0.17 in 2016-17, before falling to $A0.05 in 2017-18 due to expectations that the iron ore price will fall. Glyn Lawcock of UBS forecasts a dividend of $A0.18 per share in 2016-17 and $A0.11 in 2017-18, while Goldman Sachs and Morgan Stanley anticipate a big fall in the total payout for both financial years.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, CREDIT SUISSE (AUSTRALIA) LIMITED, UBS HOLDINGS PTY LTD, GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, SHAW AND PARTNERS LIMITED, DEUTSCHE BANK AG, JEFFERIES AND COMPANY, WOODSIDE PETROLEUM LIMITED – ASX WPL

Fortescue super-sizes dividends

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Original article by Tess Ingram
The Australian Financial Review – Page: 1 & 8 : 23-Aug-16

Fortescue Metals Group has posted a 2015-16 net profit of $US985m, which is 212 per cent higher than previously. Underlying EBITDA rose by 27 per cent to $US3.2bn, although a lower spot iron ore price resulted in revenue falling by 17 per cent to $US7.1bn. Fortescue reduced its debt by $US2.9bn during the financial year. The pure-play miner has lifted its final dividend from $A0.02 per share to $A0.12, for a total payout of $A0.15 per share.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, RIO TINTO LIMITED – ASX RIO, UBS HOLDINGS PTY LTD, THOMSON REUTERS PLC

Barriers stifle growth, says BHP

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Original article by Paul Garvey
The Australian – Page: 1 & 2 : 17-Aug-16

BHP Billiton CEO Andrew Mackenzie has stressed the importance of Australia’s trade relationship with China, and warned that global economic growth could be threatened by a growing international push toward protectionism. He has also criticised a proposal by Western Australian National Party leader Brendan Grylls to impose an iron ore levy on BHP and Rio Tinto, arguing that they already make a major contribution to government revenue at state and federal level.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, NATIONAL PARTY OF AUSTRALIA, SAMARCO MINERACAO SA, AUSGRID PTY LTD

Contractors line up for Rio project

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Original article by Peter Ker, Tess Ingram
The Australian Financial Review – Page: 16 : 11-Aug-16

Rio Tinto has issued the first tender for the last phase of its Silvergrass iron ore mine, which is slated to cost $US338m ($A438m). The resources giant is seeking a contractor to supply crushing machinery, a conveyor belt and electric power to the project. Rio commenced the initial phase of the Silvergrass mine in 2015, making extensive use of construction contractors. It is expected to do so with the final phase of the mine, which is expected to produce about 20 millions of iron ore each year when it reaches full capacity.

CORPORATES
RIO TINTO LIMITED – ASX RIO, NRW HOLDINGS LIMITED – ASX NWH

BHP Billiton widens tougher payment terms across Pilbara

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Original article by Julie-anne Sprague, Tess Ingram
The Australian Financial Review – Page: 16 : 11-Aug-16

Suppliers to BHP Billiton’s iron ore operations in Western Australia have criticised its move to increase payment terms for more suppliers from 30 days to 60 days and require them to use a third-party payment vendor. BHP had already extended the payment terms of many suppliers in late 2015, and the latest move is expected to affect a relatively small proportion of companies that supply products and services to BHP Billiton Iron Ore.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, BHP BILLITON IRON ORE PTY LTD, QUANDREM, RIO TINTO LIMITED – ASX RIO