MINING CORPORATIONS – AUSTRALIA

Fears grow of pullback in iron ore prices

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Original article by Paul Garvey
The Australian – Page: 22 : 8-Mar-17

Australian iron ore miners’ earnings have been boosted by the recent spike in the price of the steel input to more than $US90 per tonne, but Evans & Partners analyst Andrew Hines warns that the rally is not sustainable. He forecasts that the iron ore price will fall from its current level to around $US45 in the second half of 2017, which will in turn hit the profits and share prices of BHP Billiton, Rio Tinto and Fortescue Metals Group. Credit Suisse and UBS recently upgraded their iron ore price forecasts for 2017.

CORPORATES
EVANS AND PARTNERS PTY LTD, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, CREDIT SUISSE (AUSTRALIA) LIMITED, UBS HOLDINGS PTY LTD, ATLAS IRON LIMITED – ASX AGO, VEDANTA RESOURCES PLC, MOUNT GIBSON IRON LIMITED – ASX MGX

Bullish BHP shoots the lights out

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Original article by Matt Chambers
The Australian – Page: 19 & 23 : 22-Feb-17

BHP Billiton has posted a 2016-17 interim underlying profit of $US3.244bn ($A4.226bn). The result was driven by factors such as strong gains in the price of iron ore and coking coal, and further cost reductions. Analysts had expected BHP’s underlying profit to be around $A3bn. BHP’s Western Australian iron ore operations achieved 47 per cent growth in underlying EBITDA, to $US4.16bn. Shareholders will receive a half-year dividend of $US0.40 per share.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, ARNHEM INVESTMENT MANAGEMENT PTY LTD, CITIGROUP PTY LTD, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

South32 saves cash for future growth

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Original article by Paul Garvey
The Australian – Page: 24 : 17-Feb-17

Australian-listed South32 has posted a 2016-17 interim net profit of $US620m ($A804m), compared with a loss of $US1.7bn previously. The BHP Billiton spin-off has a net cash position of $US859m, and CEO Graham Kerr says the group will not keep excess capital on its balance sheet in the long-term. Shareholders will receive an inaugural interim dividend of $US0.036 per share, although Macquarie had anticipated a payout of $A0.045. South32 shares eased $A0.05 on 16 February 2017, closing at $A2.62.

CORPORATES
SOUTH32 LIMITED – ASX S32, BHP BILLITON LIMITED – ASX BHP, MACQUARIE GROUP LIMITED – ASX MQG, MORGANS FINANCIAL LIMITED, PEABODY ENERGY CORPORATION

Rio chief spruiks value over volume

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Original article by Matt Chambers
The Australian – Page: 19 & 28 : 15-Feb-17

Rio Tinto expects its iron ore production in the Pilbara to be within the range of 330 to 340 million tonnes in 2017, compared with 330 million tonnes in 2016. The group has invested some $US16bn on expanding its Western Australian infrastructure over the last 10 years. However, CEO Jean-Sebastien Jacques says Rio Tinto’s focus is on value rather than volume, and it will consider the impact on the iron ore price before lifting production to take advantage of its increased capacity.

CORPORATES
RIO TINTO LIMITED – ASX RIO, BHP BILLITON LIMITED – ASX BHP, FORTESCUE METALS GROUP LIMITED – ASX FMG, VALE SA, CREDIT SUISSE (AUSTRALIA) LIMITED, CITIGROUP PTY LTD

BHP’s growth prospects still linked to oil

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Original article by Peter Ker
The Australian Financial Review – Page: 13 & 22 : 6-Feb-17

BHP Billiton’s announcement in 2016 that it would seek to increase annual coking coal production in Queensland by four million tonnes has proven to be an astute move, given the rebound in the price of coal. The Peak Downs mine achieved record output in the December quarter. BHP also advised that maintenance work on railway lines serving its Pilbara iron ore operations will be completed nine months ahead of schedule. Meanwhile, BHP is ramping up investment in its petroleum division in order to arrest a decline in production.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, UBS HOLDINGS PTY LTD, MITSUBISHI CORPORATION

Rio Tinto hit with more delay for Indo copper

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Original article by Peter Ker
The Australian Financial Review – Page: 13 & 18 : 6-Feb-17

Freeport-McMoran has advised that Rio Tinto’s share of production from the Grasberg copper and gold mine is unlikely to increase until at least 2023. Rio was slated to receive 40 per cent of the Indonesian mine’s output from 2021 under an agreement between the two companies, but Freeport has attributed the expected delay to factors such as a series of interruptions to production at the mine in the last several years. Meanwhile, Rio is forecast to post EBITDA of $US13bn and revenue of $US34.3bn for calendar 2016.

CORPORATES
RIO TINTO LIMITED – ASX RIO, FREEPORT-McMORAN COPPER AND GOLD INCORPORATED, CREDIT SUISSE (AUSTRALIA) LIMITED, BLOOMBERG LP

Mining exports reignite boom

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Original article by Paul Garvey
The Australian – Page: 19 & 32 : 3-Feb-17

Data from the Australian Bureau of Statistics shows that the value of coal and metals exports reached a new monthly high of $A13.4bn in December, compared with just $A6.4bn in January 2016. The value of coal exports rose to $A5.7bn, which is the highest level since November 2008. Iron ore exports topped $A7.7bn, which is the second-highest monthly total on record. BHP Billiton and Rio Tinto are tipped to post bumper half-year and full-year profits in coming weeks.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, WHITEHAVEN COAL LIMITED – ASX WHC, RESOLUTE MINING LIMITED – ASX RSG, NEW SOUTH WALES MINERALS COUNCIL, DEUTSCHE BANK AG

BHP, Rio go on mine tax attack

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Original article by Paige Taylor
The Australian – Page: 5 : 3-Feb-17

The Chamber of Minerals & Energy of Western Australia has defended the mining industry’s advertising campaign targeting the proposed increase in the state’s iron ore levy. A spokesman says the proposal by WA National Party leader Brendan Grylls will reduce investment in the state and cost nearly 3,000 jobs in the Pilbara. Premier Colin Barnett has criticised the advertising campaign, but stresses that the levy will not be increased if the Coalition wins the election on 11 March.

CORPORATES
THE CHAMBER OF MINERALS AND ENERGY OF WESTERN AUSTRALIA INCORPORATED, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, NATIONAL PARTY OF AUSTRALIA, WESTERN AUSTRALIA. DEPT OF THE PREMIER AND CABINET

Fast finish for Rio iron exports

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Original article by Peter Ker
The Australian Financial Review – Page: 13 & 18 : 16-Jan-17

Data from the Port of Dampier shows that Rio Tinto shipped 37.43 million tonnes of iron ore through the port in the December 2016 quarter, compared with 33.93 million tonnes in the September quarter. Glyn Lawcock of UBS says Rio Tinto should meet its revised guidance of between 325 million and 330 million tonnes from the Pilbara for calendar 2016. The group will release its production results for the full year on 17 January 2017, while its financial results will be released on 8 February.

CORPORATES
RIO TINTO LIMITED – ASX RIO, PORT OF DAMPIER, UBS HOLDINGS PTY LTD, WHITEHAVEN COAL LIMITED – ASX WHC, HANCOCK PROSPECTING PTY LTD, SINOSTEEL CORPORATION, FORTESCUE METALS GROUP LIMITED – ASX FMG, BHP BILLITON LIMITED – ASX BHP, ATLAS IRON LIMITED – ASX AGO, BC IRON LIMITED – ASX BCI, MINERAL RESOURCES LIMITED – ASX MIN, ST BARBARA LIMITED – ASX SBM, NEWCREST MINING LIMITED – ASX NCM, ROY HILL HOLDINGS PTY LTD, WOODSIDE PETROLEUM LIMITED – ASX WPL, AUSTRALIA. DEPT OF THE TREASURY

Forrest cautious on iron outlook

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Original article by Andrew White
The Australian – Page: 15 & 16 : 13-Jan-17

Iron ore is trading at around $US80 a tonne, although it is tipped to fall to $US51.60 by mid-2017 and $US46.70 in 2018. The price of the steel input bottomed at $US36 per tonne in 2015, prompting Fortescue Metals Group to slash its debt and reduce its workforce. Fortescue also reduced its costs to just $US14.31 per tonne, but chairman Andrew Forrest says the group aims to achieve further cost reductions given the outlook for the iron ore price. Forrest also continues to advocate action to end slavery, and he has urged all Australian companies to take a similar stance.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, WALK FREE FOUNDATION, MINDEROO FOUNDATION, ROY HILL IRON ORE PTY LTD, VALE SA, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO