MINING CORPORATIONS – AUSTRALIA

End-year cyclone threat for miners, LNG producers

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Original article by Peter Ker
The Australian Financial Review – Page: 4 : 19-Dec-16

The Bureau of Meteorology has warned that there is the potential for a tropical cyclone to hit Western Australia’s north-west coast prior to Christmas. The bureau has advised iron ore and LNG producers to be alert for a possible cyclone, but stresses that it is too soon to predict whether this will occur. Cyclone Stan disrupted the Pilbara’s iron ore exports in January.

CORPORATES
AUSTRALIA. BUREAU OF METEOROLOGY, RIO TINTO LIMITED – ASX RIO, BHP BILLITON LIMITED – ASX BHP, FORTESCUE METALS GROUP LIMITED – ASX FMG, ROBE RIVER IRON ASSOCIATES, MITSUI AND COMPANY (AUSTRALIA) LIMITED, NIPPON STEEL AND SUMITOMO METAL CORPORATION

Nova set to return more than nickel and dimes as prices rise

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Original article by Paul Garvey
The Australian – Page: 22 : 15-Dec-16

Independence Group has made the first shipment of nickel concentrate from the Nova mine in Western Australia, which it acquired in the 2015 takeover of Sirius Resources. Independence CEO Peter Bradford notes that the commencement of construction work at the Nova deposit coincided with a downturn in the mining industry, which in turn reduce the cost of developing the project. He adds that Independence is now looking at potential acquisitions, including gold assets.

CORPORATES
INDEPENDENCE GROUP NL – ASX IGO, SIRIUS RESOURCES NL

Forrest now third richest as iron ore rally delivers $5.3bn windfall

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Original article by Chris Kohler
The Australian – Page: 19 & 28 : 14-Dec-16

Bloomberg estimates that the net worth of Fortescue Metals Group founder Andrew Forrest has risen to $A7.34bn, making him the third-wealthiest individual in Australia. The 244 per cent rise in Fortescue’s share price during 2016 has boosted his wealth by $A5.34bn. The stock is currently trading at around $A6.43, compared with just $A1.45 in January. The iron ore price has risen by nearly 92 per cent in 2016, although BHP Billiton CEO Andrew Mackenzie is among those who believe that the recent rally is not sustainable.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, BLOOMBERG LP, BHP BILLITON LIMITED – ASX BHP, VISY INDUSTRIES AUSTRALIA PTY LTD, STANDARD AND POOR’S ASX 200 INDEX, RIO TINTO LIMITED – ASX RIO, MORGAN STANLEY AUSTRALIA LIMITED, GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD, BELL POTTER SECURITIES LIMITED, JP MORGAN AUSTRALIA LIMITED, MACQUARIE GROUP LIMITED – ASX MQG

FMG can be ‘high growth, high yield’

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Original article by Peter Ker
The Australian Financial Review – Page: 18 : 9-Dec-16

Shares in Fortescue Metals Group have gained 23 per cent since Donald Trump won the US presidential election. The pure-play iron ore producer is now valued at around $A20bn, and the 33.32 per cent stake of founder and chairman Andrew Forrest is worth nearly $A7bn. Forrest has downplayed the potential for a trade war between the US and China, which would weigh on Fortescue’s share price. He has also rejected suggestions that mining companies cannot boast both high yields and high growth.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT

Rio chair’s confusion over pay

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Original article by James Chessell
The Australian Financial Review – Page: 13 & 16 : 8-Dec-16

Rio Tinto chairman Jan du Plessis has told a UK parliamentary committee of the growing complexity of the remuneration packages of British executives. He noted in particular the trend to measure executives’ performance by an increasing number of performance criteria. Du Plessis also conceded that he has trouble understanding some aspects of Rio Tinto’s remuneration policy, and said companies must do more to justify the high salaries paid to their executives.

CORPORATES
RIO TINTO LIMITED – ASX RIO, SABMILLER PLC, ANHEUSER-BUSCH INBEV SA/NV, HIGH PAY CENTRE, GREAT BRITAIN. OFFICE OF THE PRIME MINISTER

Capex still in free fall, but signs of life emerge

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Original article by Paul Garvey
The Australian – Page: 32 : 8-Dec-16

Data from the Australian Bureau of Statistics shows that mining companies reduced their investment in new projects by 10.6 per cent in the September 2016 quarter. The sector’s capital expenditure has fallen for 14 consecutive quarters. However, this may lead to an undersupply of such commodities, which in turn could prompt renewed capex. There are already indications of an upturn in greenfields exploration and IPO activity in the minerals sector.

CORPORATES
AUSTRALIAN BUREAU OF STATISTICS, ASSOCIATION OF MINING AND EXPLORATION COMPANIES, METALICITY LIMTED – ASX MCT, PANORAMIC RESOURCES LIMITED – ASX PAN, CITIGROUP PTY LTD

BHP tops big oil in Mexico

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Original article by Peter Ker
The Australian Financial Review – Page: 1 & 6 : 7-Dec-16

BHP Billiton has acquired a 60 per cent stake in the Trion oil field in the Gulf of Mexico, following a highly-contested auction process. BHP will initially pay $US62.4m for the stake, while the deal also requires it to spend at least $US320m ($A429m) on an appraisal program. Mexico’s state-owned Pemex, which will have a 40 per cent stake in Trion, estimates that the oil field could contain about 485 million barrels of oil equivalent. BP also submitted a bid to acquire the Trion stake.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, PEMEX PETROLEOS MEXICANOS, BP PLC, COLONIAL FIRST STATE GLOBAL ASSET MANAGEMENT, MACQUARIE GROUP LIMITED – ASX MQG, RIO TINTO LIMITED – ASX RIO, NEWCREST MINING LIMITED – ASX NCM, OZ MINERALS LIMITED – ASX OZL, MEXICO. MINISTRY OF ENERGY

BHP considers selling Bowen Basin coal asset

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Original article by Peter Ker
The Australian Financial Review – Page: 15 : 5-Dec-16

A BHP Billiton spokesperson has downplayed speculation that the resources giant could seek a buyer for the Gregory Crinum complex in Queensland, which it owns in partnership with Mitsubishi. BHP had shelved plans to sell Gregory Crinum in 2013, due to a downturn in the coking coal price. However, talk of a possible sale has been prompted by the recent rally in the price of coking coal, which is fetching more than $US300 per tonne. BHP mothballed the Crinum longwall mine in 2015.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, MITSUBISHI CORPORATION, ANGLO AMERICAN PLC, BECHTEL PTY LTD, RIO TINTO LIMITED – ASX RIO, GLENCORE PLC, BATCHFIRE RESOURCES, AUSTRALIAN PACIFIC COAL LIMITED – ASX AQC, WESFARMERS LIMITED – ASX WES, PEABODY ENERGY CORPORATION, SOUTH32 LIMITED – ASX S32, RBC CAPITAL MARKETS

Rio Tinto suspends Oyu Tolgoi shipments to China

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Original article by James Thomson
The Australian Financial Review – Page: 15 : 5-Dec-16

Turquoise Hill Resources expects the Oyu Tolgoi mine in Mongolia to produce between 175,000 and 195,000 tonnes of copper concentrate and at least 255,000 ounces of gold in 2016. The Rio Tinto-controlled company has advised that the mine’s shipments to China have been put on hold in response to the introduction of new border regulations. A spokesman for Rio Tinto is optimistic that the issue can be resolved quickly. The mine’s copper production is expected to top 500,000 per annum when a $US3.5bn underground expansion is completed.

CORPORATES
RIO TINTO LIMITED – ASX RIO, TURQUOISE HILL RESOURCES LIMITED, UNITED STATES. SECURITIES AND EXCHANGE COMMISSION

Windfall for mining sector could hit $20b

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Original article by Jens Meyer
The Australian Financial Review – Page: 25 : 1-Dec-16

Macquarie Group estimates that financial market analysts will need to increase their 2018 earnings forecasts for resources groups by around 200 per cent if commodity prices remain at around current levels. Macquarie’s Jason Todd notes that this equates to a profit boost of about $A20bn for the sector. He argues that many analysts have factored the rise in commodity prices into their forecasts for 2016-17, but many have neglected to upgrade their earnings forecasts beyond the current financial year.

CORPORATES
MACQUARIE GROUP LIMITED – ASX MQG, STANDARD AND POOR’S ASX 200 INDEX