South32 poised to exit S African coal assets as profit plunges

Original article by Nick Evans
The Australian – Page: 20 : 23-Aug-19

Diversified miner South32 has posted a 2018-19 statutory net profit of $US389m, which is 71 per cent lower than previously. The result was marred by a $US504m impairment charge associated with its South African thermal coal assets. Underlying earnings fell by 25 per cent to $US992m. Meanwhile, South32 is set to sell its South African coal mines to Seriti Resources, and CEO Graham Kerr has ruled out buying any more thermal coal assets, including BHP’s Mt Arthur mine.

CORPORATES
SOUTH32 LIMITED – ASX S32, SERITI RESORCES, BHP GROUP LIMITED – ASX BHP

Potash bull sees upside in BHP push at Jansen

Original article by Peter Ker
The Australian Financial Review – Page: 23 : 22-Aug-19

BHP expects to have a capital expenditure budget of about $US8bn for fiscal 2021, and CEO Andrew Mackenzie has indicated that less than $US500m will be allocated to the Olympic Dam mine in South Australia and the Jansen potash project in Canada. A decision on whether to proceed with the Jansen project is likely within 18 months. Getting it to the production stage is slated to cost between $US5.3bn and $US5.7bn, and Tal Lomnitzer of Janus Henderson says rising global demand for food means the project will deliver long-term benefits for BHP and its shareholders.

CORPORATES
BHP GROUP LIMITED – ASX BHP, JANUS HENDERSON GROUP PLC – ASX JHG, ELLIOTT MANAGEMENT CORPORATION

BHP takes Rio’s iron ore heavyweight title

Original article by Nick Evans
The Australian – Page: 21 : 21-Aug-19

BHP has become the world’s lowest-cost iron ore producer, after its average unit cost of production fell to $US11.89 a tonne in the second half of 2018-19. Meanwhile, BHP expects iron ore shipments from the Pilbara to top 286 million tonnes in 2019-20. However, BHP does face some challenges; it recently advised that the iron content of its Jimblebar Fines iron ore product will fall from 61 per cent to 59.5 per cent during 2019-20, while two autonomous haulage trucks at the Jimblebar mine remain out of action following a collision in March.

CORPORATES
BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO

BHP grade issues at Pilbara mines cloud the outlook for iron ore

Original article by Nick Toscano
The Sydney Morning Herald – Page: Online : 19-Aug-19

BHP recently advised that the iron content of its ‘Jimblebar Fines’ iron ore product will fall from 61 per cent to 59.5 per cent during 2019-20. Jimblebar Fines accounts for around 15 per cent of BHP’s iron ore sales from Western Australia, with most of its Pilbara output being exported to China. Industry observers indicate that the iron content downgrade is partly the result of problems with BHP’s fleet of autonomous trucks, which has required it to mine in pits with lower-quality ore.

CORPORATES
BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO

BHP to release a dividend smash hit

Original article by Peter Ker
The Australian Financial Review – Page: 14 : 19-Aug-19

The consensus of analysts polled by Bloomberg is that BHP will post a 2018-19 underlying profit of $US9.91bn on 20 August. UBS is more bullish, forecasting a profit of at least $US10bn. UBS also expects shareholders to receive a final dividend of $US0.82 per share, with a full-year payout of $US2.39. Citigroup in turn anticipates a final dividend of $US0.79 a share and a total dividend of $US2.36 for the year. BHP paid out $US8.6bn ($12.7bn) worth of dividends earlier in 2019.

CORPORATES
BHP GROUP LIMITED – ASX BHP, UBS HOLDINGS PTY LTD, CITIGROUP PTY LTD, BLOOMBERG LP, RIO TINTO LIMITED – ASX RIO

Whitehaven books record profit, doles out special dividend

Original article by Nick Evans
The Australian – Page: Online : 16-Aug-19

Whitehaven Coal has reported a statutory net profit of $527.9 million for the 2019 fiscal year, while advising that its net profit after tax of $564.9 million was a record one for the company. Whitehaven’s underlying EBITDA of $1.04 billion was up $29.8 million on the previous corresponding period. Whitehaven declared a final dividend of $0.13 per share, along with a special dividend of $0.17 per share. Whitehaven achieved an average price of $US100/tonne for its thermal coal for the year, up $US2/tonne.

CORPORATES

Are BHP shareholders on board with crusading boss?

Original article by Janet Albrechtsen
The Australian – Page: Online : 14-Aug-19

BHP CEO Andrew Mackenzie has shown he is not averse to speaking out on issues such as climate change and a separate voice for indigenous people in the Constitution; he has indicated it is proper that he should do so. However, it is reasonable to ask whether BHP shareholders are comfortable with his stance, as well as querying where the BHP board stands on the issues he is raising and whether his views have their sanction. It is possible that giving indigenous Australians a separate voice could at some point impact on BHP’s shareholder value, so it is reasonable to ask whether Mackenzie has given the board any projections regarding this possibility.

CORPORATES
BHP GROUP LIMITED – ASX BHP

Iron ore outlook not so bleak: analysts

Original article by Al Root
The Australian – Page: Online : 15-Aug-19

Goldman Sachs analyst Paul Young has upgraded his rating for Fortescue Metals from ‘hold’ to ‘buy’, despite the recent slump in the price of iron ore. Young has also set a price target of $9.80 for Fortescue, around 35 per cent higher than recent levels. Although JP Morgan has noted recently that Vale is producing more ore and Chinese steel inventories are on the increase, Young notes that Goldman’s commodities team has recently upgraded 2019, 2020 and 20201 estimated iron ore prices.

CORPORATES
GOLDMAN SACHS AUSTRALIA PTY LTD, FORTESCUE METALS GROUP LIMITED – ASX FMG, VALE SA, JP MORGAN AUSTRALIA LIMITED, CORONADO GLOBAL RESOURCES INCORPORATED – ASX CRN

Cadia peaks for Newcrest with $1billion bounty

Original article by Peter Ker
The Australian Financial Review – Page: 17 : 12-Aug-19

Newcrest Mining is expected to confirm in the week beginning 12 August that its Cadia gold mine in New South Wales generated over $1 billion of earnings in the year to 30 June. However, such a result is unlikely to be repeated, as Cadia’s production is expected to decline over coming decades. Meanwhile, Newcrest is tipped to finalise the purchase of a 70 per cent stake in the Red Chris mine in Canada from Imperial Metals for $US806.5 million ($1.18 billion) by 16 August.

CORPORATES
NEWCREST MINING LIMITED – ASX NCM, IMPERIAL METALS

Digging deeper

Original article by Peter Ker, William McInnes
The Australian Financial Review Boss – Page: 16-21 : 9-Aug-19

BHP has taken a stronger stance on social and environmental issues such as gender diversity and climate policy under current CEO Andrew Mackenzie. He has also been outspoken on policies such as company tax cuts, free trade and Indigenous rights. Mackenzie believes that companies should take a stance on issues that are likely to have a major impact on them, as well as issues that could have a negative impact if they are not adequately addressed. He recently told an annual investor summit that contributing to the communities in which BHP operates is one of the ways in which it create value for shareholders.

CORPORATES
BHP GROUP LIMITED – ASX BHP