MINING CORPORATIONS – AUSTRALIA

Private equity looks at BHP’s shale assets

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Original article by James Thomson
The Australian Financial Review – Page: 15 & 22 : 26-Feb-18

BHP Billiton’s US shale assets are tipped to fetch at least $US10bn. Peter O’Connor of Shaw & Partners notes that this equates to about eight per cent of BHP’s market capitalisation. Energy companies such as Chevron and Anadarko are likely to consider some of the shale assets, which have also attracted interest from private equity firms. The private equity sector has ramped up its investment in energy assets in recent years.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, SHAW AND PARTNERS LIMITED, CHEVRON CORPORATION, ANADARKO PETROLEUM CORPORATION, EOG RESOURCES INCORPORATED, ROYAL DUTCH SHELL PLC, WARBURG PINCUS AND COMPANY, ATX ENERGY PARTNERS, THE BLACKSTONE GROUP LP, EAGLECLAW MIDSTREAM VENTURES, ENERGY TRANSFER PARTNERS LP

OZ looks at stepping up output

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Original article by Matt Chambers
The Australian – Page: 20 : 23-Feb-18

OZ Minerals has posted a 2017 net profit of $A231m, which is 114 per cent higher than previously. CEO Andrew Cole says the company hopes to begin an early-stage scoping study on a potential expansion of the Carrapateena copper and gold mine in early 2019. The South Australian mine is under construction and slated to commence production in late 2019. OZ Minerals shareholders will receive a final dividend of $A0.14 per share, with a full-year payout of $A0.20 per share.

CORPORATES
OZ MINERALS LIMITED – ASX OZL, CASSINI RESOURCES LIMITED – ASX CZI

BHP on brink of bigger shareholder returns

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Original article by Peter Ker
The Australian Financial Review – Page: 25 : 22-Feb-18

Hayden Bairstow of Macquarie Group says there is potential for BHP Billiton to return an additional $US1.9bn to shareholders in the second half of 2017-18 and at least $US2.4bn in 2018-19. He adds that the latter figure could be higher if BHP sells its US shale assets and opts to distribute the proceeds to investors. However, BHP CEO Andrew Mackenzie has declined to comment on the group’s plans for the proceeds of the exit from shale. Meanwhile, BHP is expected to make a decision on its proposed South Flank iron ore mine within six months.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, MACQUARIE GROUP LIMITED – ASX MQG, MORGANS FINANCIAL LIMITED, RIO TINTO LIMITED – ASX RIO, ROYAL DUTCH SHELL PLC

Discounts put $1b hole in Fortescue’s earnings

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Original article by Peter Ker
The Australian Financial Review – Page: 17 : 22-Feb-18

Fortescue Metals Group has posted a 2017-18 interim net profit of $US681m. It is 44 per cent lower than previously but exceeded analysts’ expectations. Fortescue’s received prices for iron ore fell by 15 per cent over the period, and the widening gap between lower-grade ore and the price of benchmark ore reduced its underlying EBITDA by $US734m. Shareholders will receive an interim dividend of $A0.11 per share, compared with analysts’ forecasts for a payout of $A0.14 per share.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, BHP BILLITON LIMITED – ASX BHP, SHAW AND PARTNERS LIMITED

BHP surges on oil, copper

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Original article by Matt Chambers
The Australian – Page: 17 & 20 : 21-Feb-18

BHP Billiton has posted a 2017-18 interim underlying net profit of $US4.05bn ($A5.11bn). Although the result was 25 per cent higher than previously, it was below the consensus forecast of analysts. BHP’s statutory profit of $US2.02bn was down 37 per cent, due primarily to exceptional item associated with the Trump administration’s company tax cuts. Revenue exceeded market expectations at $US21.78bn, an increase of 21 per cent, and the interim dividend has risen from $US0.40 per share to $US0.55.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, ELLIOTT ASSOCIATES LIMITED PARTNERSHIP, RBC CAPITAL MARKETS, CITIGROUP PTY LTD

Union readies for new tug of war with BHP

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Original article by Peter Ker
The Australian Financial Review – Page: 6 : 20-Feb-18

Iron ore shipments from Port Hedland could potentially be disrupted due to the Australian Institute of Marine & Power Engineers’ proposed legal action against BHP Billiton. Rivtow, which provides tugboat services to BHP at Port Hedland, operates on a partnership model. However, the company is believed to have begun employing marine engineers on some of its tugboats, which the AIMPE claims would give it access under workplace right of entry laws.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, THE AUSTRALIAN INSTITUTE OF MARINE AND POWER ENGINEERS, RIVTOW MARINE PTY LTD, RIVERSIDE MARINE PTY LTD, TEEKAY MARINE PTY LTD, WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION, FORTESCUE METALS GROUP LIMITED – ASX FMG, KOTUG, LIBERAL PARTY OF WESTERN AUSTRALIA, AUSTRALIAN LABOR PARTY, MITSUBISHI CORPORATION

Rio Tinto digs in as Vale raises iron ore grades

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Original article by Peter Ker
The Australian Financial Review – Page: 15 : 19-Feb-18

Brazilian iron ore miner Vale has advised that the average iron grade of its ore rose to 64.3 per cent in the December 2017 quarter. Vale has been progressively increasing the quality of its iron ore, due to factors such as increased output at its higher-grade mines and a corresponding fall in production at mines that yield lower-grade ore. Although Vale has indicated that it aims to further lift the average grade of its iron ore, Rio Tinto has ruled out similar action at its Australian iron ore mines.

CORPORATES
VALE SA, RIO TINTO LIMITED – ASX RIO, BHP BILLITON LIMITED – ASX BHP, FORTESCUE METALS GROUP LIMITED – ASX FMG, CITIC LIMITED, ANSHAN IRON AND STEEL COMPANY

Power departs a job well done

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Original article by Paul Garvey
The Australian – Page: 19 : 16-Feb-18

Fortescue Metals Group has slashed its gross debt and ramped up iron ore production since Nev Power became CEO in mid-2011. Production costs have also been reduced from an average of $US53.23 per tonne to $US12.08. Power will step down as CEO on 16 February, and he has flagged the likelihood of taking on a number of directorships in his post-Fortescue career. However, Power doubts that he will accept another full-time executive position, and he has ruled out a career in politics.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, CREDIT SUISSE AG, JP MORGAN AND COMPANY INCORPORATED, BANK OF AMERICA CORPORATION, DEUTSCHE BANK AG, ANGLO AMERICAN PLC

BHP shareholders back Elliott

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Original article by Matt Chambers
The Australian – Page: 19 & 30 : 9-Feb-18

Clarke Wilkins of Citigroup says BHP Billiton’s market valuation could rise if its dual-listed structure is abolished, although he adds that a number of factors would determine the extent of any such upside. Activist hedge fund Elliott Management has reignited the debate on BHPs dual listing, calling for an independent review of the costs and benefits of shifting to a primary listing in Australia. Brenton Saunders of BT Financial Group and Andrew Preston of Aberdeen Standard Investment support Elliott’s proposal.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, ELLIOTT MANAGEMENT CORPORATION, BT FINANCIAL GROUP PTY LTD, ABERDEEN STANDARD INVESTMENT, FTI CONSULTING INCORPORATED

Elliott’s new push to end BHP dual listing shaky

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Original article by Matt Chambers
The Australian – Page: 20 : 8-Feb-18

A report produced by FTI Consulting on behalf of Elliott Management estimates that the financial benefits of abolishing BHP Billiton’s dual-listed structure could be worth about $US22bn. However, some $US14.1bn of this figure is based on the average performance of other companies that have scrapped dual listings. The report also concludes that shifting to a primary listing in Australia would release some $US8.7bn worth of franking credits, as the proportion of Australian investors on BHP’s share register would rise. BHP’s own cost-benefit analysis shows that scrapping the dual listing would result in costs of $US1.2bn.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, ELLIOTT MANAGEMENT CORPORATION, FTI CONSULTING INCORPORATED