MINING CORPORATIONS – AUSTRALIA

Fortescue CFO hits back at Vale

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Original article by Perry Williams
The Australian Financial Review – Page: 15 & 20 : 1-Jun-15

The break-even price for iron ore producer Fortescue Metals Group was about $US60 per tonne in late 2014, but the group aims to reduce this to $US41 during the next three months. CFO Stephen Pearce says Fortescue expects its break-even price to fall slightly below that of Brazilian rival Vale in the near-term. He has also rejected suggestions by the China Iron & Steel Association’s Li Xinchuang that Fortescue will need to take on an equity partner.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, VALE SA, CHINA IRON AND STEEL INDUSTRY ASSOCIATION, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, DEUTSCHE BANK AG, MINERALS COUNCIL OF AUSTRALIA

AGL, New Hope to take hit from Norway divestment

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Original article by Ben Potter
The Australian Financial Review – Page: 23 : 29-May-15

Norway’s Government Pension Fund Global exited the share register of Whitehaven Coal in 2014, following a government directive to terminate its exposure to the coal sector. The Norwegian Government now wants the sovereign wealth fund to divest shares in electricity companies that have a high exposure to coal-fired generation and mining companies whose revenues are heavily weighted toward thermal coal. This could force it to offload shares in AGL Energy and New Hope Corporation.

CORPORATES
AGL ENERGY LIMITED – ASX AGL, NEW HOPE CORPORATION LIMITED – ASX NHC, WHITEHAVEN COAL LIMITED – ASX WHC, GOVERNMENT PENSION FUND GLOBAL (NORWAY), BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, SOUTH32 LIMITED – ASX S32, MACQUARIE GENERATION, LOY YANG A, YANCOAL AUSTRALIA LIMITED – ASX YAL, COKAL LIMITED – ASX CKA, COCKATOO COAL LIMITED – ASX COK, AXA SA, OXFORD UNIVERSITY, CLIMATE INSTITUTE (AUSTRALIA) LIMITED

It’s ‘inevitable’ Fortescue will need a Chinese equity partner

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Original article by Perry Williams
The Australian Financial Review – Page: 17 & 22 : 28-May-15

The China Iron & Steel Association’s deputy secretary Li Xinchuang believes that Fortescue Metals Group will eventually need an equity partner in order to be globally competitive. He argues that a Chinese partner would make sense for Fortescue, and notes that the iron ore producer’s high level of debt could become a problem unless it takes on an equity partner. Fortescue CEO Nev Power has stressed several times that an equity partner is not on the group’s agenda.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, CHINA IRON AND STEEL INDUSTRY ASSOCIATION, CHINA METALLURGICAL INDUSTRY PLANNING ASSOCIATION, SHANGHAI BAOSTEEL GROUP CORPORATION, CITIC LIMITED, AUSTRALIA. FOREIGN INVESTMENT REVIEW BOARD, VALE SA, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO

UBS slaps a buy on gold stocks – except for two

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Original article by Stephen Cauchi
The Australian Financial Review – Page: 27 : 28-May-15

The gold price is trading at around $US1,188 per ounce, compared with $US1,150 in March 2015. UBS is bullish about most Australian-listed gold producers, and its top picks include Evolution Mining and Alacer Gold. However, UBS has a "neutral" recommendation on Independence Group and a "sell" rating on Newcrest Mining. Meanwhile, Reuters notes that there has been an upturn in mergers and acquisitions in the gold sector in 2015.

CORPORATES
UBS HOLDINGS PTY LTD, EVOLUTION MINING LIMITED – ASX EVN, ALACER GOLD CORPORATION – ASX AQG, INDEPENDENCE GROUP NL – ASX IGO, NEWCREST MINING LIMITED – ASX NCM, OCEANAGOLD CORPORATION – ASX OGC, ENDEAVOUR MINING CORPORATION – ASX EVR, PERSEUS MINING LIMITED – ASX PRU, SILVER LAKE RESOURCES LIMITED – ASX SLR, REGIS RESOURCES LIMITED – ASX RRL, BEADELL RESOURCES LIMITED – ASX BDR, LA MANCHA RESOURCES INCORPORATED, BARRICK GOLD CORPORATION, NORTHERN STAR RESOURCES LIMITED – ASX NST, MINE LIFE PTY LTD, REUTERS HOLDINGS PLC

Mining royalties queried

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Original article by Phillip Coorey
The Australian Financial Review – Page: 4 : 28-May-15

Senate economics committee chairman Sam Dastyari has questioned whether the BHP Billiton and Rio Tinto offshore marketing hubs are affecting the Western Australian Government’s revenue from iron ore royalties. He says Premier Colin Barnett should look into the issue, especially given that the Australian Taxation Office is also undertaking an investigation into the practice of using trading hubs in Singapore.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, AUSTRALIAN LABOR PARTY, AUSTRALIA. SENATE STANDING COMMITTEE ON ECONOMICS, WESTERN AUSTRALIA. DEPT OF THE PREMIER AND CABINET, AUSTRALIAN TAXATION OFFICE, WESTERN AUSTRALIA. DEPT OF TREASURY AND FINANCE

Fortescue’s secret shell in Singapore

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Original article by Amanda Saunders
The Australian Financial Review – Page: 1 & 8 : 27-May-15

Fortescue Metals Group chairman Andrew Forrest recently criticised BHP Billiton and Rio Tinto for using marketing hubs in Singapore, which has lower corporate tax rate than Australia. However, it has been revealed that Fortescue itself established a Singapore-based iron ore marketing company in January 2014. The iron ore price has since shed around 55 per cent, which has significantly reduced Fortescue’s profits.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE INTERNATIONAL MARKETING, AUSTRALIAN TAXATION OFFICE, GLENCORE PLC, VALE SA

Evolution buys coveted Cowal gold mine

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Original article by Peter Ker
The Australian Financial Review – Page: 20 : 26-May-15

Barrick Gold Corporation will sell its Cowal gold mine in New South Wales to Evolution Mining. The deal will increase Evolution’s annual gold output to more than 800,000 ounces, making it Australia’s second-largest listed gold miner. Jo Battershill of UBS says the Cowal’s mines $US550m ($A704m) sale price is near his estimate of fair value. Evolution will partially finance the deal via a $A248m capital raising.

CORPORATES
EVOLUTION MINING LIMITED – ASX EVN, BARRICK GOLD CORPORATION, UBS HOLDINGS PTY LTD, NEWCREST MINING LIMITED – ASX NCM, LA MANCHA RESOURCES INCORPORATED, NORTHERN STAR RESOURCES LIMITED – ASX NST

BHP Billiton fined $31m over Olympics largesse

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Original article by John Kehoe, Nick McKenzie, Richard Baker, Lucille Keen
The Australian Financial Review – Page: 8 : 22-May-15

The US Securities & Exchange Commission has fined resources giant BHP Billiton $US25m ($A31.6m) over the provision of hospitality services to government officials during the 2008 Beijing Olympic Games. BHP was found to have breached anti-bribery laws by providing Olympic tickets and hotel accommodation to officials from Asian and African countries, including China. BHP was a sponsor of the 2008 Olympics.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, UNITED STATES. SECURITIES AND EXCHANGE COMMISSION, AUSTRALIAN FEDERAL POLICE, WESTERN AUSTRALIA. CORRUPTION AND CRIME COMMISSION

FMG defends plan to expand

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Original article by Peter Ker, Shaun Drummond
The Australian Financial Review – Page: 19 : 21-May-15

Fortescue Metals Group’s Peter Meurs says encouraging results from the first stage of a magnetite project in Western Australia may prompt it to proceed to the next stage. The Iron Bridge joint venture has initially targeted two million tonnes of magnetite ore, and Meurs believes that this could be increased to 20 million tonnes. He has refuted suggestions that this would add to the global oversupply of iron ore, arguing that the bulk of iron ore exported from Australia is haematite ore.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, SHANGHAI BAOSTEEL GROUP CORPORATION, FORMOSA HA TINH STEEL CORPORATION, GRANGE RESOURCES LIMITED – ASX GRR, MINERALS COUNCIL OF AUSTRALIA, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, CHINA INTERNATIONAL TRUST AND INVESTMENT CORPORATION, ANSHAN IRON AND STEEL COMPANY, GINDALBIE METALS LIMITED – ASX GBG

Abbott tipped to dump ore probe

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Original article by Phillip Coorey
The Australian Financial Review – Page: 6 : 21-May-15

Prime Minister Tony Abbott says the Federal Government has not yet decided whether to hold a parliamentary inquiry into the iron ore industry. However, he stressed that it is inappropriate for governments to intervene in free markets. Abbott had been in favour of an inquiry only days earlier, but some Coalition MPs oppose any such move.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, LIBERAL PARTY OF AUSTRALIA