MINING CORPORATIONS – AUSTRALIA

Rio tips pay inflation as profits surge

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Original article by Peter Ker
The Australian Financial Review – Page: 1 & 20 : 8-Feb-18

Rio Tinto has posted a 2017 underlying profit of $US8.6bn ($A10.9bn), which is 69 per cent higher than previously. The full-year result was boosted by $US4.1bn due to a rise in the prices of key commodities, such as iron ore and coal. Shareholders will receive a second-half dividend of $US1.80 per share, with the full-year payout rising to a record $US2.90 per share. Meanwhile, CEO Jean-Sebastien Jacques says the strong profit growth is likely to prompt employees across Rio Tinto’s global operations to seek wage increases.

CORPORATES
RIO TINTO LIMITED – ASX RIO, AUSTRALIAN LABOR PARTY, AUSTRALIAN BUREAU OF STATISTICS, BLOOMBERG LP

Rio investors tipped for mighty big win

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Original article by Darren Gray
The Age – Page: 23 : 6-Feb-18

Rio Tinto will release its full-year results on 7 February, and Macquarie Wealth Management forecasts that it will reveal underlying earnings of $US8.88 billion, up 74 per cent, and that cash from operations will rise by 63 per cent to $US13.809 billion. Macquarie also predicts that Rio shareholders will receive a final dividend of $US1.96 per share. This would bring Rio’s total dividend payment for 2017 to $US3.06 per share.

CORPORATES
RIO TINTO LIMITED – ASX RIO, MACQUARIE WEALTH MANAGEMENT

Rio Tinto denies accusation of $700m Dutch tax dodge

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Original article by Peter Ker
The Australian Financial Review – Page: 20 : 2-Feb-18

Rio Tinto has denied claims that it and Turquoise Hill Resources tried to avoid tax in Mongolia and Canada in relation to the Oyu Tolgoi mine in Mongolia. The accusations have been made by Dutch not-for-profit agency SOMO. The mine is operated by Oyu Tolgoi LLC, which is 66 per cent owned by Turquoise Hill and 34 per cent owned by the Mongolian government; Rio Tinto in turn owns 50.79 per cent of Turquoise Hill. SOMO’s claims relate to the use of Turquoise Hill subsidiaries in the Netherlands and Luxembourg to source funds for the mine project, with favourable tax treatment available in those countries.

CORPORATES
RIO TINTO LIMITED – ASX RIO, TURQUOISE HILL RESOURCES LIMITED, OYU TOLGOI LLC, CENTRE FOR RESEARCH ON MULTINATIONAL CORPORATIONS, MOVEIT PTY LTD, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA. EXPORT FINANCE AND INSURANCE CORPORATION

Rio Tinto Grasberg deal may deliver $4.3bn windfall

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Original article by Matt Chambers
The Australian – Page: 20 : 1-Feb-18

Rio Tinto is scheduled to take up a 40 per cent stake in Indonesia’s Grasberg copper and gold mine in 2022. Rio Tinto has a book value of $US1.15bn on its stake in the mine, but Paul Young of Deutsche Bank suggests that its stake could potentially fetch up to $US3.5bn ($A4.3bn) if the Indonesian Government pays market value. Meanwhile, the Centre for Research on Multinational Corporations will shortly release a report on Rio Tinto’s tax payments associated with the Oyu Tolgoi copper and gold mine in Mongolia.

CORPORATES
RIO TINTO LIMITED – ASX RIO, DEUTSCHE BANK AG, CENTRE FOR RESEARCH ON MULTINATIONAL CORPORATIONS, OYU TOLGOI LLC, CREDIT SUISSE (AUSTRALIA) LIMITED, FREEPORT-McMORAN COPPER AND GOLD INCORPORATED

Rival MinRES contradicts FMG on iron discounts

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Original article by Peter Ker
The Australian Financial Review – Page: 14 : 1-Feb-18

Mineral Resources has advised that it stockpiled about 500,000 tonnes of iron ore fines during the December 2017 quarter, in response to the ongoing price discount for lower-grade ore. In contrast to Fortescue Metals Group, Mineral Resources expects the price discount to be sustained for some time. Mineral Resources also sought to counter the price discount by changing its iron ore blend in a bid to deliver supply buyers with a higher-quality product. Fortescue also intends to increase the average grade of its iron ore.

CORPORATES
MINERAL RESOURCES LIMITED – ASX MIN, FORTESCUE METALS GROUP LIMITED – ASX FMG, INDEPENDENCE GROUP NL – ASX IGO

Cycle turning on discounts, says Fortescue

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Original article by Peter Ker
The Australian Financial Review – Page: 17 : 31-Jan-18

Fortescue Metals Group CEO Nev Power expects the price gap between lower-grade iron ore and the benchmark price to narrow in coming months. He says the December 2017 quarter is likely to represent the low-point for the price discount. Fortescue sold its iron ore at just 66 per cent of the benchmark price during the quarter, compared with 86-88 per cent between 2014 and 2016. Meanwhile, Citigroup has forecast that Fortescue will reduce its net debt to $US2.4bn by mid-2018, after it rose to $US3.3bn at the end of 2017.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, CITIGROUP PTY LTD, SHAW AND PARTNERS LIMITED, CLEVELAND-CLIFFS INCORPORATED, RIO TINTO LIMITED – ASX RIO, VALE SA

Rio targeted by activist over MCA

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Original article by Peter Ker
The Australian Financial Review – Page: 6 : 30-Jan-18

The Australasian Centre for Corporate Responsibility will use Rio Tinto’s upcoming shareholders’ meetings in London and Melbourne to lobby the resources group to review its membership of the Minerals Council of Australia. Rio Tinto is said to have similar concerns as BHP Billiton regarding the MCA’s stance on issues such as climate change and coal-fired power generation. BHP will decide whether to retain its MCA membership by the end of 2018, in response to lobbying by the ACCR.

CORPORATES
RIO TINTO LIMITED – ASX RIO, MINERALS COUNCIL OF AUSTRALIA, AUSTRALASIAN CENTRE FOR CORPORATE RESPONSIBILITY, BHP BILLITON LIMITED – ASX BHP, WHITEHAVEN COAL LIMITED – ASX WHC, WORLD COAL ASSOCIATION

Atlas irons out a profit problem

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Original article by Paul Garvey
The Australian – Page: 19 : 30-Jan-18

Shares in Atlas Iron shed more than 16 per cent to close at $A0.026 on 29 January, after the iron ore miner advised that its Pilbara operations posted a cash loss of $A1.2m during the December 2017 quarter. Atlas Iron’s net cash position fell to $A104m at the end of the quarter, amid a sharp rise in the price discount for lower-grade iron ore. CEO Cliff Lawrenson says Atlas Iron’s daily operations are making money despite the price discount. He adds that the expected closure of Cliffs’ Koolyanobbing iron ore mine later in 2018 could create new supply opportunities for Atlas.

CORPORATES
ATLAS IRON LIMITED – ASX AGO, CLEVELAND-CLIFFS INCORPORATED, PILBARA MINERALS LIMITED – ASX PLS, FORTESCUE METALS GROUP LIMITED – ASX FMG

Kingsgate activist opts to reduce its holding

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Original article by Peter Ker
The Australian Financial Review – Page: 13 : 24-Jan-18

UK-based Metal Tiger has sold about 5.5 million shares in gold miner Kingsgate Consolidated in the wake of its failed bid for a board spill. The divestment has reduced Metal Tiger’s stake from 8.1 per cent to 5.6 per cent, and CEO Michael McNeilly stresses that the company will continue to be an active investor. Meanwhile, Kingsgate chairman Ross Smyth-Kirk has ruled out boardroom changes in the near-term. The company is pursuing legal action against the Thai Government over its closure of the Chatree mine.

CORPORATES
KINGSGATE CONSOLIDATED LIMITED – ASX KCN, METAL TIGER PLC

Miners lead confidence surge

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Original article by Matt Chambers, Sarah-Jane Tasker
The Australian – Page: 15 & 21 : 24-Jan-18

The latest Mining Business Outlook survey by Newport Consulting shows that mining company executives are upbeat about the outlook for commodity prices in 2018. The survey found that 75 per cent of respondents are "cautiously optimistic" and 17 per cent are "very optimistic" about the outlook. Meanwhile, 42 per cent of respondents expect to "moderately" increase spending in 2018, and about 25 per cent intend to hire additional staff. CEOs in the manufacturing, construction and services industries are also positive about the outlook in 2018, according to a separate survey by the Australian Industry Group.

CORPORATES
NEWPORT CONSULTING PTY LTD, THE AUSTRALIAN INDUSTRY GROUP, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, DEUTSCHE BANK AG, RESMED INCORPORATED – ASX RMD, MACQUARIE BANK LIMITED – ASX MBL, RESERVE BANK OF AUSTRALIA, ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, INTERNATIONAL MONETARY FUND