MINING CORPORATIONS – AUSTRALIA

Argus slams Elliott bid to overhaul BHP

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Original article by Paul Garvey
The Australian – Page: 19 & 22 : 5-May-17

Australian businessman and former BHP Billiton chairman Don Argus says the conditions imposed on the company to gain government approval for its 2001 merger will thwart Elliott Management’s push to scrap the dual listing. BHP itself has suggested that the activist hedge fund’s proposal is unlikely to gain regulatory approval, while Treasurer Scott Morrison has signalled that unwinding the dual listing would not be in the national interest. Meanwhile, Rio Tinto chairman Jan du Plessis says his company has considered and rejected abolishing its own dual-listed structure on a number of occasions.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, ELLIOTT MANAGEMENT CORPORATION, ELLIOTT ASSOCIATES LIMITED PARTNERSHIP, RIO TINTO LIMITED – ASX RIO, ARNHEM INVESTMENT MANAGEMENT PTY LTD, AUSTRALIA. DEPT OF THE TREASURY

Fund urges BHP board overhaul

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 1 & 14 : 5-May-17

The Tribeca Global Natural Resources Fund has outlined a four-point plan for BHP Billiton. Tribeca says BHP should use the retirement of chairman Jac Nasser to pursue boardroom renewal. It argues that the current board has overseen the loss of some $US30bn of shareholder wealth, adding that this could have topped $US80bn if more mergers and acquisitions had gone ahead. Tribeca favours retention of BHP’s dual listing, although it supports Elliott Associates’ proposal for BHP to offload its US onshore petroleum assets.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, TRIBECA GLOBAL NATURAL RESOURCES FUND, ELLIOTT ASSOCIATES LIMITED PARTNERSHIP, ELLIOTT MANAGEMENT CORPORATION, TRIBECA INVESTMENT PARTNERS PTY LTD

Rio looks long term and offers Jacques 10 years at the top

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Original article by Peter Ker
The Australian Financial Review – Page: 25 : 4-May-17

Todd Warren of Colonial First State Global Asset Management supports Rio Tinto’s revelation that CEO Jean-Sebastien Jacques has been given a 10-year contract. He argues that such a contract allows management to make decisions with a company’s long-term interests in mind. Warren and Peter O’Connor of Shaw & Partners are both of the view that CEOs with long mandates should be subject to short-term performance standards. The length of Jacques contract was not specified when he was appointed in March 2016.

CORPORATES
RIO TINTO LIMITED – ASX RIO, COLONIAL FIRST STATE GLOBAL ASSET MANAGEMENT, SHAW AND PARTNERS LIMITED, ORIGIN ENERGY LIMITED – ASX ORG, LEIGHTON HOLDINGS LIMITED, WORLEYPARSONS LIMITED – ASX WOR

Moody’s deals blow to Elliott BHP plan

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Original article by Peter Ker
The Australian Financial Review – Page: 25 : 4-May-17

Moody’s Investors Service has upgraded BHP Billiton’s "A3" credit rating outlook from "stable" to "positive". The ratings agency has cited factors such as BHP’s prospects for further growth in earnings and free cashflow due to the continued strength of commodity prices. However, Moody’s adds that the restructuring proposals of activist hedge fund Elliott Management could adversely affect BHP’s credit rating.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, MOODY’S INVESTORS SERVICE INCORPORATED, ELLIOTT MANAGEMENT CORPORATION, ELLIOTT ASSOCIATES LIMITED PARTNERSHIP

Treasurer blocks BHP offshore move

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Original article by Emily Ritchie
The Australian – Page: 1 & 6 : 4-May-17

The Federal Government has signalled that it would intervene to thwart any attempt to shift BHP Billiton’s primary sharemarket listing to the UK. Treasurer Scott Morrison says retaining BHP’s dual listing is in the national interest, given the resources group’s economic contribution to Australia and BHP’s large domestic shareholder base. BHP itself has estimated that the proposal by activist hedge fund Elliott Management would cost around $US1.3bn ($A1.73bn). Morrison has also suggested that BHP directors could face criminal and civil action if the dual listing is abolished.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, AUSTRALIA. DEPT OF THE TREASURY, ELLIOTT MANAGEMENT CORPORATION, MOODY’S INVESTORS SERVICE INCORPORATED, ARCONIC INCORPORATED, ALCOA INCORPORATED

Elliott spruiks BHP plan to Sydney hedge funds

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Original article by Peter Ker, John Kehoe
The Australian Financial Review – Page: 15 : 3-May-17

Representatives of activist US hedge fund Elliott Associates have organised meetings with Sydney-based institutional investors as it seeks to gain support for its proposal for a restructuring of the resources giant. However, some large local investors have indicated that they have not held talks with Elliott and will not back its proposals. Elliott has also been targeting several other global companies, including Arconic and Samsung.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, ELLIOTT ASSOCIATES LIMITED PARTNERSHIP, ELLIOTT MANAGEMENT CORPORATION, ARCONIC INCORPORATED, SAMSUNG ELECTRONICS COMPANY LIMITED, ALCOA INCORPORATED

US miner lauds activist campaign against BHP

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Original article by Peter Ker
The Australian Financial Review – Page: 18 : 1-May-17

Cliffs Natural Resources CEO Lourenco Goncalves contends that the recent fall in the price of iron ore is in part the fault of BHP Billiton CFO Peter Beaven. He had forecast that the iron ore price would weaken in a speech on 9 March 2017, and the price has been in decline since then. Goncalves has welcomed the activist campaign being waged against BHP by Elliott Associates, while also accusing BHP of over-production of iron ore.

CORPORATES
CLIFFS NATURAL RESOURCES INCORPORATED, BHP BILLITON LIMITED – ASX BHP, ELLIOTT ASSOCIATES LIMITED PARTNERSHIP, VALE SA, FORTESCUE METALS GROUP LIMITED – ASX FMG, ARCONIC INCORPORATED, CASABLANCA CAPITAL LP, ROY HILL IRON ORE PTY LTD

Pilbara deluge cuts BHP output

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Original article by Paul Garvey
The Australian – Page: 20 : 1-May-17

The revenue of BHP Billiton, Fortescue Metals Group, Rio Tinto and Woodside Petroleum was slashed by about $A2.9bn in the March 2017 quarter, due to heavier than usual rainfall in the Pilbara region of Western Australia. BHP has attributed its 11 per cent downturn in iron ore production in the Pilbara to the wet season. Likewise, production at the North West Shelf LNG project was 12.7 per cent lower. Meanwhile, the State Government’s iron ore royalties are likely to have been reduced by about $A170m as a result of the adverse weather conditions.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, WOODSIDE PETROLEUM LIMITED – ASX WPL, ATLAS IRON LIMITED – ASX AGO, AUSTRALIA. BUREAU OF METEOROLOGY

Newcrest hit by power prices, Cadia damage

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Original article by Peter Ker, Tess Ingram
The Australian Financial Review – Page: 19 : 28-Apr-17

Newcrest Mining has warned that full-year gold production for 2016-17 is likely to be at the lower end of its guidance. Newcrest has also indicated that its Cadia gold mine in New South Wales is unlikely to return to full capacity for some time following an earthquake. Meanwhile, the company has advised of an increase of about 90 per cent in the base price it will pay for electricity at Cadia under a new supply agreement for 2017-18. Newcrest says it will seek a better supply deal.

CORPORATES
NEWCREST MINING LIMITED – ASX NCM, RBC CAPITAL MARKETS

Atlas Iron needs to diversify, says new chief Lawrenson

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Original article by Tess Ingram
The Australian Financial Review – Page: 25 : 27-Apr-17

Atlas Iron MD Cliff Lawrenson says the proposed Corunna Downs mine remains the junior iron ore producer’s main priority. He adds that Atlas will seek to lift annual production to around 10-15 million tonnes over the long-term, but he notes that the company may need to diversify its operations to ensure that it avoids the financial problems that nearly caused its collapse in 2014. Rival iron ore producers BC Iron and Mount Gibson Iron are actively seeking to diversify.

CORPORATES
ATLAS IRON LIMITED – ASX AGO, BC IRON LIMITED – ASX BCI, MOUNT GIBSON IRON LIMITED – ASX MGX, KALIUM LAKES LIMITED – ASX KLL, PILBARA MINERALS LIMITED – ASX PLS