MINING CORPORATIONS – AUSTRALIA

Why BHP, Rio fear Sanders

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Original article by Peter Ker
The Australian Financial Review – Page: 18 : 4-Feb-16

The future of the proposed Resolution copper mine joint venture between BHP Billiton and Rio Tinto could depend on the outcome of the 2016 US presidential election. The mine’s development is opposed by Senator Bernie Sanders, who is seeking nomination as the Democratic Party’s candidate. He has narrowly lost the Iowa caucus to Democrats frontrunner Hillary Clinton, after previously being regarded as having little chance of being a contender for the party’s nomination.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, DEMOCRATIC PARTY (UNITED STATES)

Rich BHP dividends face chop

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Original article by Amanda Saunders
The Australian Financial Review – Page: 1 & 8 : 3-Feb-16

Shares in BHP Billiton closed 2.2 per cent lower at $A14.92 on 2 February 2016, after Standard & Poor’s reduced its credit rating from "A+" to "A". The ratings agency warned of the potential for a further downgrade if BHP retains its progressive dividend policy amid a downturn in commodity prices. Aberdeen Asset Management’s John Manning expects BHP to adopt a dividend payout ratio, while some observers forecast that its 2015-16 interim dividend will be reduced by 50 per cent to $US0.31 per share.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, STANDARD AND POOR’S CORPORATION, ABERDEEN ASSET MANAGEMENT LIMITED, ARGO INVESTMENTS LIMITED – ASX ARG, AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED – ASX AFI, BLACKROCK INCORPORATED, RIO TINTO LIMITED – ASX RIO

Iron ore price descends towards Roy Hill’s break-even threshold

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Original article by Peter Ker
The Australian Financial Review – Page: 17 : 2-Feb-16

POSCO has estimated that the Roy Hill iron ore project’s break-even price is currently in the low $US40 per tonne range. The South Korean steel producer, which has a 12.5 per cent stake in the project, expects Roy Hill’s marginal cost of production to fall to the mid-$US30/per tonne range when it reaches full capacity in 2017. The benchmark iron ore price has fallen below $US42/per tonne in early February 2016. Fortescue Metals Group’s break-even price is said to be between $US28 and $US32 per tonne.

CORPORATES
ROY HILL IRON ORE PTY LTD, POSCO, FORTESCUE METALS GROUP LIMITED – ASX FMG, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, HANCOCK PROSPECTING PTY LTD, CHINA STEEL CORPORATION, MARUBENI CORPORATION, UBS HOLDINGS PTY LTD

Lihir mine in PNG gives Newcrest results boost

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Original article by Peter Ker
The Australian Financial Review – Page: 17 : 29-Jan-16

Newcrest Mining achieved total gold production of 1.2 million ounces in the first half of 2015-16, putting it on track to achieve its full-year target of 2.4 to 2.6 million ounces. It boasted all-in sustaining production costs of $US770 an ounce during the half-year. Meanwhile, gold production at the Lihir mine in Papua New Guinea rose by 26 per cent during the December 2015 quarter. Newcrest shares rose by $A0.36 to $A13.88 on 28 January 2016.

CORPORATES
NEWCREST MINING LIMITED – ASX NCM, HARMONY GOLD MINING COMPANY LIMITED

Rio offloads coal mine for $347m

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Original article by Brian Robins
The Australian Financial Review – Page: 15 & 20 : 28-Jan-16

Indonesia-based Salim Group will pay $US244m ($A347m) for Rio Tinto’s undeveloped Mount Pleasant thermal coal asset in New South Wales. The deal also includes payment of a two per cent royalty if the thermal coal price rises to $US72.50 ($A104) per tonne. Thermal coal is currently trading at around $US50 per tonne, compared with about $US100 just 18 months ago. Rio Tinto previously sold its 40 per cent stake in the Bengalla thermal coal mine.

CORPORATES
RIO TINTO LIMITED – ASX RIO, SALIM GROUP, ANGLO AMERICAN PLC, CITIGROUP PTY LTD, NEW HOPE CORPORATION LIMITED – ASX NHC, PATERSONS SECURITIES LIMITED, ASCIANO LIMITED – ASX AIO, PACIFIC NATIONAL PTY LTD, AURIZON HOLDINGS LIMITED – ASX AZJ, PEABODY ENERGY CORPORATION, INDOFOOD, AUSTRALIA. FOREIGN INVESTMENT REVIEW BOARD

BHP should end its dual-listed era

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Original article by Matthew Stevens
The Australian Financial Review – Page: 30 : 27-Jan-16

BHP Billiton considered and ultimately rejected a proposal to abolish its dual listing when it was planning the South32 spin-off in 2015. The dual listing was previously reviewed in 2006. The future of the dual listing also came under scrutiny when Australian-listed BHP Billiton Limited had to transfer some of its profit to the London-listed BHP Billiton to enable the latter to pay a dividend in 2015. With a decision on the progressive dividend policy likely to be made in February 2016, it may then be the right time to reassess the dual listing.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, BHP BILLITON PLC, SOUTH32 LIMITED – ASX S32, RIO TINTO LIMITED – ASX RIO, LONDON STOCK EXCHANGE, ALLENS, ASCIANO LIMITED – ASX AIO, CHINA INVESTMENT CORPORATION, PORT OF DARWIN, PORT OF MELBOURNE, GLOBAL INFRASTRUCTURE MANAGEMENT LLC, LANDBRIDGE GROUP COMPANY LIMITED, PEOPLE’S LIBERATION ARMY OF CHINA

BHP’s ratings under pressure as S&P cuts commodity prices

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Original article by Matt Chambers
The Australian – Page: 19 : 25-Jan-16

A move by Standard & Poor’s to reduce its price assumptions for key commodities could jeopardise BHP Billiton’s credit rating. The ratings agency has scaled back its iron ore price forecast for 2016 and 2017 by 20 per cent, to $US40 per tonne, while price forecasts for other metals have also been downgraded. Meanwhile, Richard Knights of Liberum Capital has warned that BHP may need to undertake a rights issue to protect its credit rating.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, STANDARD AND POOR’S CORPORATION, LIBERUM CAPITAL LIMITED, MERRILL LYNCH AND COMPANY INCORPORATED

South32 cuts its debts further

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Original article by Paul Garvey
The Australian – Page: 18 : 22-Jan-16

South32’s net debt fell to $US115m in the December 2015 quarter, after it repaid $US81 million worth of debt during the period. The BHP Billiton spin-off’s debt had exceeded $US400m at the start of 2015-16, and Paul McTaggart of Credit Suisse forecasts that it will have no debt at the end of the financial year. Meanwhile, South32 has reported that its metallurgical coal output fell by 41 per cent during the second quarter, while manganese production was 37 per cent lower.

CORPORATES
SOUTH32 LIMITED – ASX S32, BHP BILLITON LIMITED – ASX BHP, CREDIT SUISSE (AUSTRALIA) LIMITED

Gender equality one commodity avoiding the rout

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Original article by Barry FitzGerald
The Australian – Page: 17 : 21-Jan-16

BHP Billiton’s vice-president of strategy and performance, Laura Tyler, says there has been a significant change in the mining sector’s attitude toward women in the industry since she began her career. CEO Andrew Mackenzie has implemented initiatives aimed at increasing gender diversity within BHP, where the proportion of senior positions that are held by women has increased from eight per cent to 17 per cent over the last five years.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, SOUTH32 LIMITED – ASX S32

BHP’s biggest question is its $US6.6b payout

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Original article by Amanda Saunders
The Australian Financial Review – Page: 13 & 23 : 21-Jan-16

Iron ore was the only one of BHP Billiton’s "four pillars" to post an increase in production during the six months to December 2015. The resources giant expects to achieve its 2015-16 production guidance for coal, copper and petroleum, although iron ore output is likely to be lower than forecast as a result of the Samarco disaster in Brazil. Meanwhile, BHP’s progressive dividend policy is expected to come under scrutiny again, and UBS forecasts that its interim dividend will be slashed by 50 per cent to $A0.31 per share.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, UBS HOLDINGS PTY LTD, SHAW AND PARTNERS LIMITED, MACQUARIE BANK LIMITED – ASX MBL, SAMARCO MINERACAO SA, RIO TINTO LIMITED – ASX RIO