MINING ENGINEERING – AUSTRALIA

No cost surge as Pilbara’s big three plan builds

roymorgansocial Leave a comment

Original article by James Thomson
The Australian Financial Review – Page: 15 : 7-Jan-19

NRW Holdings CEO Jules Pemberton says the current iron ore mine construction activity in the Pilbara is different to the boom of 2011-2013. He notes that the new mines being developed by BHP, Rio Tinto and Fortescue Metals Group are to replace existing mines rather than to expand output. Pemberton adds that there are also no signs of an increase in labour costs or a skills shortage in the Pilbara. NRW was recently awarded a $57m contract for work on Fortescue’s Eliwana iron ore mine; the mining and civil contractor is also undertaking work on BHP’s South Flank mine.

CORPORATES
NRW HOLDINGS LIMITED – ASX NWH, BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, GOLDING CONTRACTORS PTY LTD

Miners warn of graduate crisis

roymorgansocial Leave a comment

Original article by Matt Chambers
The Australian – Page: 19 & 22 : 29-Aug-18

The Minerals Council of Australia has forecast that the number of mining engineering graduates will fall from 171 a year to just 47 between 2017 and 2020 due to a decline in enrolments. However, the MCA’s modelling suggests that at least 200 new graduates will be required each year to offset the number of mining engineers who exit the sector. South32 CEO Graham Kerr and Newcrest Mining CEO Sandeep Biswas are among the industry executives who have expressed concern about the long-term impact of the decline in enrolments for mining-related university courses.

CORPORATES
MINERALS COUNCIL OF AUSTRALIA, SOUTH32 LIMITED – ASX S32, NEWCREST MINING LIMITED – ASX NCM, DIGGERS AND DEALERS FORUM

Maintenance boom for resources

roymorgansocial Leave a comment

Original article by Tess Ingram
The Australian Financial Review – Page: 13 & 18 : 19-Dec-16

BIS Shrapnel forecasts that Australia’s resources sector will increase expenditure on maintenance work by 52 per cent over the next five years, to $A10bn. Adrian Hart of BIS says this will include both expenditure that has been deferred and spending on new assets. He adds that there could be some consolidation in the mining services sector as a result. The oil and gas sector is expected to account for the bulk of the increased expenditure on maintenance activity.

CORPORATES
BIS SHRAPNEL PTY LTD, PROGRAMMED MAINTENANCE SERVICES LIMITED – ASX PRG, SEVEN GROUP HOLDINGS LIMITED – ASX SVW, WORLEYPARSONS LIMITED – ASX WOR, MONADELPHOUS GROUP LIMITED – ASX MND, UGL LIMITED – ASX UGL, CIMIC GROUP LIMITED – ASX CIM, RIO TINTO LIMITED – ASX RIO

Mining sector costs on rise as cycle turns

roymorgansocial Leave a comment

Original article by Paul Garvey
The Australian – Page: 15 & 16 : 19-Dec-16

There are indications of an upturn in mining industry activity in Australia in the wake of rising commodity prices. Independence Group CEO Peter Bradford notes that there is growing demand for mining equipment and the services of mining contractors, as well as growing competition for skilled labour. Fortescue Metals Group CEO Nev Power adds that it is becoming more difficult for the iron ore miner to achieve further cost savings, particularly with the rising oil price, which has in turn increased the cost of diesel fuel.

CORPORATES
INDEPENDENCE GROUP NL – ASX IGO, FORTESCUE METALS GROUP LIMITED – ASX FMG, BARMINCO PTY LTD, DFP RECRUITMENT SERVICES PTY LTD, REGIS RESOURCES LIMITED – ASX RRL, GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD

BHP urges suppliers to join tax fight

roymorgansocial Leave a comment

Original article by Peter Ker
The Australian Financial Review – Page: 25 & 30 : 10-Nov-16

BHP Billiton executive Mike Henry has warned that mining services firms would be adversely affected by the Western Australian National Party’s proposed increase in the state’s iron ore levy. He says the mining services sector should lobby against the policy, arguing that they will receive less work if the levy is increased from $A0.25 per tonne to $A5, while employment in the sector will fall. Henry also says there should be greater collaboration between resources groups and mining services firms.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, NATIONAL PARTY OF AUSTRALIA, RIO TINTO LIMITED – ASX RIO, ORICA LIMITED – ASX ORI

Ichthys key to CIMIC bid for UGL

roymorgansocial Leave a comment

Original article by James Thomson
The Australian Financial Review – Page: 15/20 : 11-Oct-16

Shares in listed engineering contractor UGL closed 48.6 per cent higher at $A3.18 on 10 October 2016, in response to a takeover bid from CIMIC Group. The cash offer of $A3.15 per share values the bid at $A524m, but Allan Gray Australia MD Simon Mawhinney argues that it will be difficult to assess the bid until UGL updates investors on its Ichthys LNG contracts. UGL’s 2015-16 financial accounts included a provision of $US200m associated with its Ichthys construction contracts.

CORPORATES
UGL LIMITED – ASX UGL, CIMIC GROUP LIMITED – ASX CIM, ALLAN GRAY AUSTRALIA PTY LTD, CITIGROUP PTY LTD, HOCHTIEF AG, GRUPO ACS, MACQUARIE GROUP LIMITED – ASX MQG, BT INVESTMENT MANAGEMENT LIMITED – ASX BTT, UBIQUE ASSET MANAGEMENT PTY LTD, DEVINE LIMITED – ASX DVN, SEDGMAN LIMITED, AUSTRALIA. FOREIGN INVESTMENT REVIEW BOARD, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Bradken board backs Hitachi bid

roymorgansocial Leave a comment

Original article by Paul Garvey, Bridget Carter
The Australian – Page: 17 & 19 : 4-Oct-16

Directors of listed mining services group Bradken have endorsed a takeover bid from Hitachi Construction ­Machinery. The offer of $A3.25 per values Bradken at $A688.5m, or $A976.1m when its debt is included, and is 34 per cent higher than the stock’s last trading price. The Japanese suitor boasts annual sales of $A10bn and a market capitalisation of $A5.5bn. President and CEO Yuichi Tsujimoto says the two companies’ operations are complementary.

CORPORATES
BRADKEN LIMITED – ASX BKN, HITACHI CONSTRUCTION MACHINERY COMPANY LIMITED, PACIFIC EQUITY PARTNERS PTY LTD, BAIN CAPITAL LLC, KOCH INDUSTRIES INCORPORATED, CHAMP PRIVATE EQUITY PTY LTD, SIGDO KOPPERS SA, EMECO HOLDINGS LIMITED – ASX EHL, AUSENCO LIMITED – ASX AAX, CARDNO LIMITED – ASX CDD, SEDGMAN LIMITED

Booming gold sector powers Barminco profit

roymorgansocial Leave a comment

Original article by Paul Garvey
The Australian – Page: 22 : 29-Sep-16

Unlisted mining services group Barminco has posted a net profit of $A42.4m for 2015-16, compared with a net loss of $A48.4m previously, while EBIT rose from $A43.6 million to $A57m. Barminco now boasts debt of just $US306m after repaying some $US79.8m ($104m) during fiscal 2016. The group has benefited from its strong presence in the gold sector, which accounts for more than 50 per cent of its contracts.

CORPORATES
BARMINCO PTY LTD, GRESHAM PRIVATE EQUITY LIMITED, NORTHERN STAR RESOURCES LIMITED – ASX NST

Fortescue keeps contract in-house to cuts costs

roymorgansocial Leave a comment

Original article by Paul Garvey
The Australian – Page: 20 : 5-Apr-16

Downer EDI’s contract to provide mining services at Fortescue Metals Group’s Christmas Creek iron ore mine will not be renewed when it expires in September 2016. Fortescue has already dispensed with mining contractors at its other iron ore mines, and CEO Nev Power says the move will result in further cost reductions. Downer EDI has previously estimated that the contract was worth $A720m, but says its financial results for fiscal 2016 are unlikely to be affected.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, DOWNER EDI LIMITED – ASX DOW, MACMAHON HOLDINGS LIMITED – ASX MAH

More mining collapses ‘inevitable’

roymorgansocial Leave a comment

Original article by Amanda Saunders
The Australian Financial Review – Page: 18 : 29-Jun-15

KordaMentha’s Scott Langdon expects more Australian mining services groups to experience financial problems in 2015. He says privately-owned firms whose turnover is below $A50m are most vulnerable to insolvency. However, Langdon adds that investors and lenders will seek alternatives to insolvency such as debt restructuring deals. He also forecasts an increase in cost reduction measures in the resources sector, such as staff and wage cuts, as well as the departure of some CEOs.

CORPORATES
KORDA MENTHA AND COLLEAGUES PTY LTD, BRADKEN LIMITED – ASX BKN, BIS INDUSTRIES LIMITED, ATLAS IRON LIMITED – ASX AGO, SIGDO KOPPERS SA, CHAMP PRIVATE EQUITY PTY LTD