MINING CORPORATIONS – AUSTRALIA

Rio Tinto backs Yancoal bid again

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Original article by James Thomson
The Australian Financial Review – Page: 13 & 18 : 27-Jun-17

Rio Tinto has concluded that Yancoal’s bid for its Hunter Valley coal assets is superior to the rival offer from Glencore, despite the latter’s sweetened bid. Glencore has made a cash offer of $US2.675bn for the thermal coal assets, but Rio notes that it could take 12 months for Glencore to gain regulatory approval. In contrast, Yancoal is offering $US2.45bn in cash and royalty payments of $US240m, while it is expected to pass the last regulatory hurdles within months.

CORPORATES
RIO TINTO LIMITED – ASX RIO, YANCOAL AUSTRALIA LIMITED – ASX YAL, GLENCORE PLC, COAL AND ALLIED INDUSTRIES LIMITED, ROYAL BANK OF CANADA, YANKUANG CORPORATION GROUP LIMITED, SENRIGAN CAPITAL GROUP LIMITED, NOBLE GROUP LIMITED, BLOOMBERG LP, CITIGROUP PTY LTD

Yancoal tipped to match Rio bid by Glencore

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Original article by James Thomson
The Australian Financial Review – Page: 13 & 18 : 26-Jun-17

Peter O’Connor of Shaw & Partners says Rio Tinto’s sale of its Hunter Valley coal assets will be a good deal for shareholders, as the bidding war between Glencore and Yancoal continues. Glencore has sought to trump Yancoal by increasing its own offer, which is now $US255m higher than Yancoal’s offer of $US2.45bn. Rio Tinto recently named Yancoal as preferred bidder, and its board is likely to respond to Glencore’s revised offer on 26 June. Meanwhile, analysts expect Rio Tinto to use the proceeds of the sale to increase its 2017 dividend.

CORPORATES
RIO TINTO LIMITED – ASX RIO, YANCOAL AUSTRALIA LIMITED – ASX YAL, GLENCORE PLC, COAL AND ALLIED INDUSTRIES LIMITED, SHAW AND PARTNERS LIMITED, ROYAL BANK OF CANADA, BLOOMBERG LP, YANKUANG CORPORATION GROUP LIMITED, CHINA. MINISTRY OF COMMERCE, CITIGROUP PTY LTD

Timely break for Atlas, MinRes

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Original article by Paul Garvey
The Australian – Page: 31 : 23-Jun-17

A six-month extension of the discount on the fees paid by mining companies to use Port Hedland’s Utah Point berth will result in cost savings of about $A12.5m for both Atlas Iron and Mineral Resources. The discount of $A2.50 per tonne had been slated to end in June. However, BHP Billiton faces increased costs of about $A9m a year after the Western Australian Government announced that fees at most ports in the Pilbara will increase. The cost to Rio Tinto and Fortescue Metals Group will be around $A13m and $A6.8m respectively.

CORPORATES
ATLAS IRON LIMITED – ASX AGO, MINERAL RESOURCES LIMITED – ASX MIN, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, WESTERN AUSTRALIA. DEPT OF TRANSPORT, NATIONAL PARTY OF AUSTRALIA

Atlas shelves Corunna project

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Original article by Paul Garvey
The Australian – Page: 20 : 22-Jun-17

Atlas Iron will increase production at its Mount Webber iron ore project by two million tonnes a year after putting its Corunna Downs project on hold. The iron ore price has fallen by about 40 per cent since Atlas approved Corunna Downs in early 2017. MD Cliff Lawrenson says it is still an important project for Atlas, and it will resume development of Corunna Downs when the iron ore price rebounds. Production at the company’s Abydos mine will end in October.

CORPORATES
ATLAS IRON LIMITED – ASX AGO, HARTLEYS LIMITED

Rio Tinto coal deal raises hopes of bigger payouts

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Original article by James Thomson
The Australian Financial Review – Page: 15 & 30 : 22-Jun-17

Rio Tinto shareholders will vote on Yancoal’s $US2.45bn ($A3.2bn) offer for its Hunter Valley thermal coal assets on 27 June. Rio Tinto CEO Jean-Sebastien Jacques says Yancoal was chosen as preferred bidder due to factors such as its decision to drop a deferred payment plan and the fact that it has already gained some regulatory approvals. Peter O’Connor of Shaw & Partners expects Rio Tinto to use some of the proceeds of the sale to increase its dividend payout, while he adds that another share buyback is also possible.

CORPORATES
RIO TINTO LIMITED – ASX RIO, YANCOAL AUSTRALIA LIMITED – ASX YAL, GLENCORE PLC, COAL AND ALLIED INDUSTRIES LIMITED, SHAW AND PARTNERS LIMITED, ROYAL BANK OF CANADA, CITIGROUP PTY LTD, GREAT BRITAIN. SERIOUS FRAUD OFFICE, BLOOMBERG LP, BARCLAYS BANK PLC

Support for BHP relisting ‘at right price’

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Original article by Matt Chambers
The Australian – Page: 17 & 20 : 20-Jun-17

Aberdeen Asset Management’s Andrew Preston says scrapping BHP Billiton’s dual-listing structure in favour of a single Australian listing may be the best option. He adds that the cost of such a restructuring would be a key consideration, but argues that many of BHP’s non-Australian assets have been divested since the dual listing was established. Preston also notes that the issue of franking credits, which are of no value to investors in BHP’s London-listed shares, would also have to be considered.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, ABERDEEN ASSET MANAGEMENT LIMITED, ELLIOTT MANAGEMENT CORPORATION, AMCOR LIMITED – ASX AMC, AMP CAPITAL INVESTORS LIMITED, AUSTRALIA. DEPT OF THE TREASURY

Australia’s miners don’t have innovation plan, says report

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Original article by Tess Ingram
The Australian Financial Review – Page: 16 : 20-Jun-17

VCI’s latest "Innovation: State of Play" report has found that around 98 per cent of Australian mining professionals regard innovation as "important" or "critical" to their long-term business strategy. However, just 26 per cent said their company’s time-frame for innovation is at least three years. In contrast, 63 per cent of South African mining companies have a long-term focus on innovation. VCI’s founding partner Graeme Stanway says that, amongst other things, local mining companies need to stress the importance of innovation when engaging with investors.

CORPORATES
VCI, RIO TINTO LIMITED – ASX RIO, BHP BILLITON LIMITED – ASX BHP, SOUTH32 LIMITED – ASX S32, FORTESCUE METALS GROUP LIMITED – ASX FMG, AUSTRALIA. DEPT OF INDUSTRY, INNOVATION AND SCIENCE

Glencore chief pitches Hunter Valley plan to Rio Tinto bosses

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Original article by Scott Murdoch
The Australian – Page: 17 : 19-Jun-17

Rio Tinto will shortly decide which of two rival bids for its Hunter Valley coal assets it will support. Glencore has offered $US2.55bn ($A3.35bn) for the Coal & Allied assets, compared with a $US2.45bn offer from China-backed Yancoal. A team of Glencore executives led by global CEO Peter Freyberg held talks with Rio Tinto executives on the weekend of 17-18 June regarding the bid. Glencore expects significant synergies by combining the Rio assets with its existing coal mines in the Hunter Valley.

CORPORATES
RIO TINTO LIMITED – ASX RIO, GLENCORE PLC, YANCOAL AUSTRALIA LIMITED – ASX YAL, COAL AND ALLIED INDUSTRIES LIMITED, YANZHOU COAL MINING COMPANY LIMITED, PORT WARATAH COAL SERVICES LIMITED

MacKenzie the hot favourite as BHP votes for new chair

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Original article by John Durie
The Australian – Page: 18 & 32 : 16-Jun-17

There is widespread support among BHP Billiton shareholders for Ken MacKenzie to become its next chairman. Amcor’s return on capital rose strongly during his tenure as CEO, and he was not on the BHP board when it made ill-fated investments in the US shale sector. However, the selection of a new chairman ultimately rests with the BHP board, which could potentially opt against MacKenzie in order to avoid suggestions that it was swayed by investors.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, AMCOR LIMITED – ASX AMC, ELLIOTT MANAGEMENT CORPORATION, ORICA LIMITED – ASX ORI, WESTPAC BANKING CORPORATION – ASX WBC, RIO TINTO LIMITED – ASX RIO, STANDARD AND POOR’S ASX 200 INDEX, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, VODAFONE AUSTRALIA LIMITED, TELSTRA CORPORATION LIMITED – ASX TLS, SINGTEL OPTUS PTY LTD, FEDERAL COURT OF AUSTRALIA, AMAZON.COM INCORPORATED, AUSTRALIA POST, AUSTRALIA. DEPT OF THE TREASURY, ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, AUSTRALIA. PRODUCTIVITY COMMISSION, AUSTRALIAN LABOR PARTY

Elliott push to overhaul BHP’s board

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Original article by Paul Garvey
The Australian – Page: 20 : 15-Jun-17

BHP Billiton will shortly select a successor to chairman Jac Nasser, but Elliott Management says the resources group should use the leadership change to undertake sweeping changes to its board. The activist hedge fund argues that many directors have been the board for a long time and approved acquisitions and share buybacks that have contributed to BHP’s underperformance. There is support among BHP shareholders for Elliott’s proposal to divest its petroleum assets, although some of the hedge fund’s other proposals have gained little traction.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, ELLIOTT MANAGEMENT CORPORATION, AMP CAPITAL INVESTORS LIMITED, AMCOR LIMITED – ASX AMC, ORICA LIMITED – ASX ORI, WESTPAC BANKING CORPORATION – ASX WBC