STRATEGIC PLANNING – AUSTRALIA

Gold mining M&A too expensive: CEOs

roymorgansocial Leave a comment

Original article by Tess Ingram
The Australian Financial Review – Page: 13 & 24 : 9-Aug-17

Gold Fields CEO Nick Holland says the South Africa-based company has ramped up spending on exploration to almost $A100m a year, citing factors such as a dearth of acquisition opportunities in the gold sector and the high cost of gold assets. He adds that exploration budgets had been slashed globally in recent years, while a number of gold assets in Australia are likely to reach the end of their mine life in coming years. Evolution Mining and Saracen Mineral Holdings are among the Australian-listed companies that are increasing their exploration programs.

CORPORATES
GOLD FIELDS LIMITED, EVOLUTION MINING LIMITED – ASX EVN, SARACEN MINERAL HOLDINGS LIMITED – ASX SAR, ST BARBARA LIMITED – ASX SBM, DIGGERS AND DEALERS FORUM, GOLD ROAD RESOURCES LIMITED – ASX GOR, RIVERSGOLD LIMITED

Anglo American vows to halve costs using technology

roymorgansocial Leave a comment

Original article by Paul Garvey
The Australian – Page: 20 : 8-Aug-17

Tony O’Neill of Anglo American says the company will seek further productivity gains via technological innovation, after lifting productivity by 70 per cent over the last 4-5 years. O’Neill has outlined some of these technologies at the annual Diggers & Dealers forum, but he noted that securing regulatory permits is the main hindrance to adopting some of the innovations. Meanwhile, Roy Hill Holdings has advised that iron ore shipments from its namesake mine totalled 4.45 million tonnes in June 2017, and shipments had averaged 2.8 million tonnes during the first half of the calendar year.

CORPORATES
ANGLO AMERICAN PLC, ROY HILL HOLDINGS PTY LTD, DIGGERS AND DEALERS FORUM, FORTESCUE METALS GROUP LIMITED – ASX FMG, RIO TINTO LIMITED – ASX RIO

Fortescue digs in for mighty cost challenge

roymorgansocial Leave a comment

Original article by Tess Ingram
The Australian Financial Review – Page: 15 : 28-Jul-17

Fortescue Metals Group shipped 170 million tonnes of iron ore in 2016-17, and the pure-play miner anticipates similar volumes in 2017-18. Fortescue has reported an average C1 cash cost of $US12.82 per tonne for 2016-17, including $US12.16 a tonne in the June quarter, and it has targeted a cash cost of $US11 to $US12 per tonne for 2017-18. CEO Nev Power says Fortescue also aims to achieve productivity and efficiency gains, while he has flagged a further reduction in its debt.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, CITIGROUP PTY LTD, MERRILL LYNCH (AUSTRALIA) PTY LTD, RBC CAPITAL MARKETS

Giants join juniors in the hunt for minerals

roymorgansocial Leave a comment

Original article by Paul Garvey
The Australian – Page: 17 & 20 : 24-Jul-17

Newcrest Mining has established a joint venture with Encounter Resources to explore for gold in Western Australia. The alliance is part of a growing trend for major global miners to enter joint venture arrangements with smaller Australian explorers. Encounter Mining MD Will Robinson says it is a cost-effective way for large miners to undertake greenfields exploration programs. He adds that more big miners are starting to ramp up their exploration in the wake of cutbacks following the downturn in the resources sector.

CORPORATES
NEWCREST MINING LIMITED – ASX NCM, ENCOUNTER RESOURCES LIMITED – ASX ENR, ASSOCIATION OF MINING AND EXPLORATION COMPANIES, RIO TINTO LIMITED – ASX RIO, ANGLOGOLD ASHANTI LIMITED – ASX AGG, ORINOCO GOLD LIMITED – ASX OGX

Woodside chief flags $6bn LNG overhaul

roymorgansocial Leave a comment

Original article by Matt Chambers
The Australian – Page: 21 : 21-Jul-17

Woodside Petroleum’s production in the June 2017 was 3.3 per cent lower than the March quarter, at 20.7 million barrels of oil equivalent. Sales revenue was 3.1 per cent lower at $US867m. The downturn has been attributed to scheduled maintenance work at the Pluto LNG project and an unplanned outage at the Karratha LNG plant. Meanwhile, Woodside has proposed investing an additional $US5bn ($A6bn) in the Karratha plant to keep it operational for another two decades and use it to process third-party gas.

CORPORATES
WOODSIDE PETROLEUM LIMITED – ASX WPL, ROYAL DUTCH SHELL PLC, BHP BILLITON LIMITED – ASX BHP, BP PLC, CHEVRON CORPORATION, MITSUI AND COMPANY LIMITED, MITSUBISHI CORPORATION

Twiggy changes his tune as Fortescue plans for iron boost

roymorgansocial Leave a comment

Original article by Paul Garvey
The Australian – Page: 17 & 20 : 18-Jul-17

Planning documents show that Fortescue Metals Group proposes to commence construction work on its Eliwana iron ore mine in the Pilbara in mid-2019, with production slated to commence in 2020 if the project proceeds. The mine would have a maximum production capacity of 50 million tonnes per year, although Fortescue expects annual output of around 30 million tonnes. Fortescue is also considering the Nyidinghu deposit to replace the Firetail mine, which has annual capacity of around 27 million tonnes.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, WESTERN AUSTRALIA. ENVIRONMENTAL PROTECTION AUTHORITY, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO

Chile’s SQM invests in Kidman lithium project

roymorgansocial Leave a comment

Original article by Tess Ingram
The Australian Financial Review – Page: 19 : 13-Jul-17

Kidman Resources has sold a 50 per cent stake in its Earl Grey lithium deposit to Chile-based SQM for $A110m. The deal comprises a cash payment of $A30m, with the balance to be provided in the form of development funding. Rather than merely exporting lithium ore, Kidman and SQM intend to build a processing plant in Australia to convert the ore to lithium hydroxide. John Deniz of Paragon Funds Management says integrated projects are likely to be more resilient if demand for lithium eases.

CORPORATES
KIDMAN RESOURCES LIMITED – ASX KDR, SOCIEDAD QUIMICA Y MINERA SA, PARAGON FUNDS MANAGEMENT, MARINDI METALS LIMITED – ASX MZN, SUPREME COURT OF WESTERN AUSTRALIA, NEOMETALS LIMITED – ASX NMT, MINERAL RESOURCES LIMITED – ASX MIN, TIANQI LITHIUM CORPORATION

Fairfax steps up Domain hard sell

roymorgansocial Leave a comment

Original article by Scott Murdoch
The Australian – Page: 24 : 10-Jul-17

Domain is losing market share to REA Group in some markets, which may make it harder for Fairfax Media directors to convince shareholders to back a proposed demerger of the property listings business. Demergers also have a chequered history in Australia. Analysis by Credit Suisse in 2015 shows that spin-offs generally perform well in their first six months as a separately-listed company, while there is typically no significant benefit for shareholders of the parent company during this period.

CORPORATES
FAIRFAX MEDIA LIMITED – ASX FXJ, DOMAIN.COM.AU, REA GROUP LIMITED – ASX REA, CREDIT SUISSE (AUSTRALIA) LIMITED, TRADE ME GROUP LIMITED – ASX TME, APN NEWS AND MEDIA LIMITED – ASX APN, NZME LIMITED – ASX NZM, AUSTRALIAN RADIO NETWORK PTY LTD, ADSHEL PTY LTD, NEWS CORP AUSTRALIA PTY LTD, NEWS CORPORATION – ASX NWS, BHP BILLITON LIMITED – ASX BHP, SOUTH32 LIMITED – ASX S32, AMCOR LIMITED – ASX AMC, PAPERLINX LIMITED – ASX PPX, ARRIUM LIMITED – ASX ARI, BLUESCOPE STEEL LIMITED – ASX BSL, CSR LIMITED – ASX CSR, RINKER GROUP LIMITED, WESTPAC BANKING CORPORATION – ASX WBC, BT INVESTMENT MANAGEMENT LIMITED – ASX BTT, TABCORP HOLDINGS LIMITED – ASX TAH, THE STAR ENTERTAINMENT GROUP LIMITED – ASX SGR, WESTFIELD CORPORATION – ASX WFD, SCENTRE GROUP – ASX SCG, TREASURY WINE ESTATES LIMITED – ASX TWE, TPG CAPITAL LP, HELLMAN AND FRIEDMAN, MORGAN STANLEY AUSTRALIA LIMITED, MACQUARIE CAPITAL PTY LTD

BHP chair under pressure to demerge oil assets

roymorgansocial Leave a comment

Original article by David Rogers
The Australian – Page: 31 : 7-Jul-17

Paul Gait of Bernstein notes that BHP Billiton has underperformed since it spun off South32, and he says demerging its petroleum division would boost the value of its core mining business. Meanwhile, Paul Young of Deutsche Bank says BHP should revise its strategy under incoming chairman Ken MacKenzie, including putting a limit on capital expenditure and setting productivity targets for its iron ore and coking coal operations. Shares in BHP have shed 1.5 per cent so far in 2017, while Rio Tinto has gained 7.5 per cent.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, BERNSTEIN INVESTMENT RESEARCH AND MANAGEMENT, DEUTSCHE BANK AG, RIO TINTO LIMITED – ASX RIO, SOUTH32 LIMITED – ASX S32, ELLIOTT MANAGEMENT CORPORATION

Fortescue confident of even more cost cutting

roymorgansocial Leave a comment

Original article by Tess Ingram
The Australian Financial Review – Page: 15 : 29-Jun-17

Iron ore miner Fortescue Metals Group aims to achieve a "C1" unit cost of production of between $US12 and $US13 per tonne in 2016-17, compared with $U50/tonne several years ago. Greg Lilleyman, Fortescue’s director of operations, is confident that the company can further reduce its costs. While he acknowledges that it will be hard to match its recent cost performance in coming years, he says there are still opportunities for more cost savings. Lilleyman also expects the price discount of lower-grade iron compared with the benchmark price to narrow.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, RIO TINTO LIMITED – ASX RIO