MINING CORPORATIONS – AUSTRALIA

BHP puts US shale back on block

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Original article by Paul Garvey
The Australian – Page: 17 & 26 : 27-Apr-17

BHP Billiton has reduced its 2017 forecast for copper production to between 1.33 million and 1.36 million tonnes due to the impact of industrial action at the Escondida mine in Chile. Metallurgical coal output is also expected to be lower due to Cyclone Debbie in Queensland, while iron ore production guidance has been reduced to between 268 million and 272 million tonnes following inclement weather in Western Australia during the March quarter. Meanwhile, BHP has flagged plans to sell its Fayetteville shale gas fields in the US.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, ELLIOTT MANAGEMENT CORPORATION, JP MORGAN AUSTRALIA LIMITED, MACQUARIE GROUP LIMITED – ASX MQG, GOLDMAN SACHS AUSTRALIA PTY LTD

Goldman turns bearish on BHP

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Original article by Matt Chambers
The Australian – Page: 19 : 26-Apr-17

The London-listed shares of BHP Billiton and Rio Tinto have fallen by around 16 per cent in the last two months. Goldman Sachs has reduced its share price targets for the UK stock of both companies. The firm now has a "sell" recommendation on BHP, citing factors such as the downturn in the price of iron ore and coking coal. Goldman Sachs also has sell ratings on Antofagasta and Kumba Resources.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, THE GOLDMAN SACHS GROUP INCORPORATED, ANTOFAGASTA PLC, KUMBA RESOURCES LIMITED, WESTPAC BANKING CORPORATION – ASX WBC

Big miners defy iron ore price slide to hold firm

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

The iron ore price has shed 33 per cent in the last month, and it has now fallen to a six-month low. However, ratings agency Standard & Poor’s has upgraded its average price forecast for 2017 from $US55 per tonne to $US66. The firm has also upgraded Rio Tinto’s "A-" credit rating from "stable" to "positive", and flagged the potential for a further upgrade within 12-18 months. Shares in Australia’s three largest iron ore producers were resilient in local trading on 19 April, despite the falling iron price.

CORPORATES
RIO TINTO LIMITED – ASX RIO, BHP BILLITON LIMITED – ASX BHP, FORTESCUE METALS GROUP LIMITED – ASX FMG, STANDARD AND POOR’S FINANCIAL SERVICES LLC, NIKKO ASSET MANAGEMENT GROUP, MERRILL LYNCH (AUSTRALIA) PTY LTD, FREEPORT-McMORAN COPPER AND GOLD INCORPORATED

Iron ore discounts take toll on Atlas

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Original article by Paul Garvey
The Australian – Page: 20 : 19-Apr-17

Iron ore miner Atlas Iron achieved an average price of $A62 per tonne in the March 2017 quarter, which is well below the average benchmark index price for the period. The company was affected by rising Chinese demand for higher grade ore, which widened the gap between the benchmark price and the lower-grade ore produced by Atlas. Adverse weather conditions in the Pilbara also resulted in Atlas’s shipments falling to 3.2 million tonnes, down from four million tonnes for the same period in 2016.

CORPORATES
ATLAS IRON LIMITED – ASX AGO, FORTESCUE METALS GROUP LIMITED – ASX FMG, RIO TINTO LIMITED – ASX RIO, CITIGROUP PTY LTD, THE STEEL INDEX LIMITED

BHP lists ‘major flaws’ in Elliott’s restructure plan

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Original article by Paul Garvey
The Australian – Page: 19 & 32 : 13-Apr-17

BHP Billiton CEO Andrew Mackenzie says the resources group has examined the restructuring proposals put forward by Elliott Management and concluded that they do not make economic sense and are not in the interests of shareholders. BHP argues that scrapping the dual listing would be costly and would have no significant benefits, while it would be unlikely to gain regulatory approval in Australia. Mackenzie also says BHP has concluded that its mining and petroleum businesses are stronger as a single entity.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, ELLIOTT MANAGEMENT CORPORATION, MORGANS FINANCIAL LIMITED, AUSTRALIA. FOREIGN INVESTMENT REVIEW BOARD, AUSTRALIA. DEPT OF THE TREASURY

Rio’s deferral of bonus to Walsh ‘reasonable’

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Original article by Peter Ker
The Australian Financial Review – Page: 13 : 12-Apr-17

Proxy adviser ISS has backed Rio Tinto’s decision to delay paying bonuses to former CEO Sam Walsh until it completes an investigation into the Simandou payments scandal. The firm concluded that Rio’s action regarding Walsh’s short and long-term bonuses was "reasonable". However, ISS also noted that in contrast to Walsh, two Rio Tinto executives who were sacked over the iron ore scandal in Guinea will lose their bonuses completely, which will cost them about $A4m apiece.

CORPORATES
RIO TINTO LIMITED – ASX RIO, INSTITUTIONAL SHAREHOLDER SERVICES INCORPORATED, MOXICO RESOURCES PLC

BHP pressured on oil spin-off

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Original article by Paul Garvey
The Australian – Page: 17 & 22 : 11-Apr-17

BHP Billiton has rejected a restructuring proposal that has been put forward by US-based hedge fund Elliott Management, arguing that any potential benefits would be exceeded by the costs and risks associated with the plan. Elliott says BHP should abandon its dual-listed structure and demerge its US petroleum assets into a separately-listed company. Elliott believes that the restructuring proposal could boost the value of BHP shares by around 50 per cent.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, ELLIOTT MANAGEMENT CORPORATION, SOUTH32 LIMITED – ASX S32, QUINTIS LIMITED – ASX QIN, GLAUCUS RESEARCH GROUP CALIFORNIA LLC

Rio Tinto ramps up ATO battle with $3.8b report

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Original article by Peter Ker
The Australian Financial Review – Page: 15 : 10-Apr-17

Rio Tinto has released a report which shows that it paid $US2.89bn ($A3.85bn) in taxes to governments in Australia during 2016. This compares with $US3.3bn in 2015. The Federal Government received a total of $US1.39bn in tax payments from Rio Tinto in 2016. The resources giant is disputing the Australian Taxation Office’s ruling that it must pay an additional $A447 million in taxes. The ruling is associated with Rio Tinto’s use of a marketing hub in Singapore. Rio’s global tax bill totalled $US3.98bn in 2016.

CORPORATES
RIO TINTO LIMITED – ASX RIO, AUSTRALIAN TAXATION OFFICE, NATIONAL PARTY OF AUSTRALIA

Strike delays copper mine projects: BHP

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Original article by Peter Ker
The Australian Financial Review – Page: 13 & 25 : 6-Apr-17

BHP Billiton executive Daniel Malchuk has advised that a recent 44-day strike at the Escondida copper mine in Chile will postpone completion of a new concentrator and a desalination plant at the mine. Both projects had been slated for completion by June 2017, and the delay could impact on the mine’s output for the 2017-18 financial year. Malchuk has also indicated that production has resumed at Escondida, although it is not yet back to full capacity. He is optimistic that the dispute over a new pay deal at Escondida can be resolved.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, MINERA ESCONDIDA LIMITADA, RIO TINTO LIMITED – ASX RIO, MITSUBISHI CORPORATION, NIPPON MINING AND METALS COMPANY LIMITED, FREEPORT-McMORAN COPPER AND GOLD INCORPORATED, MMG LIMITED – ASX MMG, OZ MINERALS LIMITED – ASX OZL

Coal shares tumble as China abandons limits

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Original article by Peter Ker, Lisa Murray
The Australian Financial Review – Page: 13 & 18 : 9-Mar-17

China’s National Development & Reform Commission has advised that it might not reinstate restrictions on the number of days the nation’s coal mines can operate. The NDRC has indicated that this will depend on the outlook for coal prices. Shares in Australian coal producers have fallen in response to the NDRC’s statement, including Yancoal Australia and Whitehaven Coal. Thermal and coking coal prices rallied in the wake of China’s decision to limit production to 276 days year in early 2016.

CORPORATES
CHINA. NATIONAL DEVELOPMENT AND REFORM COMMISSION, YANCOAL AUSTRALIA LIMITED – ASX YAL, WHITEHAVEN COAL LIMITED – ASX WHC, STANMORE COAL LIMITED – ASX SMR, NEW HOPE CORPORATION LIMITED – ASX NHC, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, SDIC INVEST, RBC CAPITAL MARKETS, TERRACOM LIMITED – ASX TER, REALM RESOURCES LIMITED – ASX RRP, AUSTRALIAN PACIFIC COAL LIMITED – ASX AQC, ANGLO AMERICAN PLC, SOUTH32 LIMITED – ASX S32