Australia/New Caledonia/Papua New Guinea Mining – Page 106

UPDATE 2-Australia iron ore magnate Rinehart weakened by court ruling – by Jane Wardell and James Regan (Reuters U.S. – May 28, 2015)

May 29, 2015

http://www.reuters.com/

SYDNEY, May 28 (Reuters) – Australian iron ore magnate Gina Rinehart’s eldest daughter won control of the $3 billion dollar family trust on Thursday in a judgment critical of Rinehart’s former control of the fund and attempts to block the long-running legal dispute.

The Supreme Court of New South Wales judgment loosens Rinehart’s legendary grip on her business empire, with almost 25 percent of Hancock Prospecting Pty Ltd held by the trust.

Rinehart owns the remainder of the family firm, which in turn owns 70 percent of Roy Hill, a Pilbara-based iron ore mine due to start shipments later this year.

South Korea’s POSCO, Japan’s Marubeni Corp and Taiwan’s China Steel Corp also have stakes in the mine, which will be Australia’s fourth-largest when it reaches full production.

Three of Rinehart’s four children – eldest Bianca Rinehart, Hope Welker and John Hancock – sued for control of the trust in 2011.

They alleged their mother acted with “gross dishonesty” as trustee, when she pushed out its vesting date until 2068, meaning all four children would not get their shares until they were in their 80s and 90s.

Gina Rinehart loses control of $5b family trust – by Louise Hall (Sydney Morning Herald – May 28, 2015)

May 28, 2015

http://www.smh.com.au/

John Hancock, the estranged son of Australia’s richest person Gina Rinehart, has won an epic legal battle over control of the family’s multibillion-dollar family trust, with his sister and ally Bianca Rinehart appointed trustee.

On Thursday, NSW Supreme Court Justice Paul Brereton appointed Bianca, 38, trustee of the Hope Margaret Hancock Trust, which was set up by her late grandfather Lang Hancock and is thought to be worth about $5 billion.

Justice Brereton also ordered Mrs Rinehart to hand up documents and accounts relating to the trust that John and Bianca had claimed were withheld from them for many years.

The decision follows a bitter and public three-and-a-half-year war that saw Mrs Rinehart and her youngest daughter, Ginia, 28, pitted against her eldest two children, John, 39 and Bianca. Hope Welker, 29, who initially launched the legal action against her mother, settled in 2013 for $45 million because of the “high degree of distress” the litigation was causing her.

Justice Brereton said: “Mrs. Rinehart has demonstrated that she is prepared to go to extraordinary lengths to retain control, directly or indirectly, of the Trust, and that she is capable of exerting enormous pressure and great influence to do so”.

Turn Out the Lights: Australia Calls Commodity Spending Boom End – by David Stringer (Bloomberg News – May 27, 2015)

May 27, 2015

http://www.bloomberg.com/

Australia, an engine room of the decade-long global commodity boom, is forecasting a staggering 90 percent plunge in spending on projects, calling time on its biggest resources bonanza since the 1850s gold rush.

After a collapse in prices from oil to iron ore, the value of Australia’s approved and financed mining and energy projects is forecast fall to about A$15 billion ($12 billion) in 2017, from A$226 billion at the end of April.

Planned iron ore projects worth at least A$10 billion have been canceled since October, according to the Department of Industry and Science. Billionaire Gina Rinehart’s Roy Hill — due to ship later this year — is Australia’s last remaining mining project being developed worth A$5 billion or more.

“The value of committed projects is about to start declining substantially,” Mark Cully, the department’s chief economist, said Wednesday in a statement. “It is clear that this will not be offset by new investments coming through the pipeline.”

Waning demand growth in key markets including China, the biggest commodities consumer, and programs by miners to cut capital expenditure mean there’s a lack of projects toward the end of this decade, the department said in a report.

China cash lining up for Fortescue Metals Group – by Matthew Stevens, Amanda Saunders and Julie-anne Sprague (Australian Financial Review – May 25, 2015)

May 26, 2015

http://www.afr.com/

Chinese-linked companies have applied to the Foreign Investment Review Board seeking permission for an investment involving Fortescue Metals Group.

Australia’s third-largest iron ore producer has held discussions with China’s largest steel producer, Baosteel, and China’s largest conglomerate, CITIC, about a recapitalision to shore up its balance sheet.

It is unclear if the applications to FIRB are from CITIC or Baosteel but sources said there is interest in Fortescue from one or more companies which are Chinese or part-Chinese owned.

There are no moves to take over Fortescue. Instead, the companies are interested in buying a stake or increasing an existing stake, sources said. A deal could involve the partial selldown by the company’s founder, chairman and biggest shareholder, Andrew Forrest.

Fortescue and Baosteel already work closely. In June 2012 the two companies merged their magnetite iron ore assets in the Pilbara into a venture called FMG Iron Ore Bridge, which is 88 per cent controlled by the Perth company and 12 per cent owned by the Chinese steel giant.

Oz Minerals CEO Andrew Cole eyes off four takeover targets – by Simon Evans (Australian Mining Review – May 25, 2015)

May 26, 2015

http://www.afr.com/

OZ Minerals chief executive Andrew Cole says the copper and gold company has four potential acquisitions it is doing due diligence on but will only proceed if the price tags are at a level that deliver good value.

Mr Cole says while geographic diversification may be an outcome if OZ does make an acquisition it is not necessarily a driver of the company’s acquisition strategy.

OZ operates just one mine, the Prominent Hill copper and gold mine in South Australia, which employs 1200 workers. He made the comments at the OZ annual meeting in Adelaide, where the company is in the process of shifting its head office to from its previous base of Melbourne.

OZ chairman Neil Hamilton said after the meeting the price paid by Evolution Mining for Barrick’s Cowal mine in New South Wales appeared to be a steep price. “It’s a robust number,” Mr Hamilton said.

Evolution bought the mine in a $US550 million ($702 million) transaction on Monday. Mr Hamilton declined to officially confirm if OZ had also been closely looking at the Cowal mine, as has been heavily speculated. “We don’t comment on speculation about sale processes,” Mr Hamilton said.

Australia’s gold miners drive M&A revival – by James Regan (Reuters U.S. – May 26, 2015)

May 26, 2015

http://www.reuters.com/

SYDNEY – May 26 Gold miners are spearheading a wave of merger and acquisition activity in Australia, riding a rebound in local gold prices to pounce on projects promising quick growth.

In the first signs of life since the country’s mining boom went bust three years ago, companies are buying assets from international rivals tightening their belts, and partnering with fellow Australian miners.

“Everyone is looking for assets that enable them to grow. We’ve seen more M&A in Australia in 2015 than in the past five years,” Ian Murray, chairman of Perth-based Gold Road Resources Ltd told Reuters, referring broadly to the level of interest in the sector.

Progressive central bank interest rate cuts aimed at knocking down the Australian dollar and falling labour and mining costs are adding fuel to the frenzy.

Gold output in the world’s second-biggest producing country after China reached a decade high last year and is tipped to rise further in 2015.

Independence Group to Buy Sirius Resources for $1.4 Billion – by Rhiannon Hoyle (Wall Street Journal – May 24, 2015)

May 25, 2015

http://www.wsj.com/

Australian gold and nickel miner Sirius Resources agreed to a cash-and-shares takeover by its larger rival

SYDNEY—A mining company that traces its roots to one man’s hunt for wreckage from a NASA space station in the Outback has become the focus of one of Australia’s biggest resources deals so far this year.

Sirius Resources NL, which is building a vast nickel mine in Western Australia state, on Monday agreed to a cash-and-shares takeover offer worth 1.8 billion Australian dollars (US$1.4 billion) by larger rival Independence Group NL. If approved at shareholder meetings in late August, the deal will create a midtier mining company producing commodities ranging from gold to nickel and zinc.

Modern-day mining companies typically owe their success to the drillbit, but Sirius’s story is a throwback to the days when Australian prospectors headed into the Outback with little more than a shovel, a compass and a map.

In 1979, Mark Creasy drove deep into Australia’s red center to search for debris from the Skylab space station, which was partly strewn across Western Australia instead of falling entirely into the Indian Ocean as the National Aeronautics and Space Administration had hoped.

UPDATE 2-Barrick sells Australian Cowal gold mine to Evolution for $550 mln – by Sam Forgione and Sonali Paul (Reuters U.S. – May 25, 2015)

May 25, 2015

http://www.reuters.com/

NEW YORK/MELBOURNE, May 25 (Reuters) – Barrick Gold , the world’s top gold producer, has agreed to sell its Cowal mine to Evolution Mining for $550 million in a deal that will turn Evolution into Australia’s second largest producer of the precious metal.

The deal gives Evolution a large, low-cost mine that will boost its output to around 800,000 ounces a year, around one-third the output of top Australian producer Newcrest Mining .

“This is a truly transformational acquisition for Evolution,” Executive Chairman Jake Klein said after the deal was announced on Monday. “This is the high quality asset we have been looking for to cornerstone our business.”

Barrick put Cowal up for sale along with its Porgera mine in Papua New Guinea, among other assets, in an effort to cut debt by $3 billion by the end of this year.

Analysts congratulated Evolution for snaring Cowal for well below the $650 million price tag it had been expected to fetch.

Australia’s Scrapped Iron-Ore Inquiry Fires Up Debate Over Output – by Rhiannon Hoyle (Wall Street Journal – May 24, 2015)

May 25, 2015

http://www.wsj.com/

Questions loom over who should control Australia’s natural resources: the nation, or the private companies that own and operate them

SYDNEY—The Australian government’s decision to reject an inquiry into the iron-ore market capped a tumultuous week during which a bitter debate over the industry’s relentless output expansion, despite sinking prices, has dominated the national discourse.

At the heart of the issue: whether a country’s natural resources belong to the nation, or the private companies that own and operate them.

Australia’s Prime Minister Tony Abbott earlier this month backed calls for the parliament’s economics committee to investigate claims that mining giants BHP Billiton Ltd. and Rio Tinto PLC have been driving down iron-ore prices by boosting production in a way that undermines their smaller competitors, as well as harming the country’s economy.

But in a sign of the rift within government itself over the issue, Australia’s Treasurer Joe Hockey late Thursday officially nixed any plans for an inquiry.

His decision followed an unusually outspoken campaign by the normally publicity-shy mining majors, with BHP’s Chief Executive Andrew Mackenzie saying any probe would be “a ridiculous waste of taxpayers’ money.”

Forrest fire: Twiggy’s secret bid to salvage iron ore price – by Andrew Burrell and Paul Garvey (The Australian – May 23, 2015)

May 25, 2015

http://www.theaustralian.com.au/

For the second time in five years, Andrew Forrest has been comprehensively out-lobbied, out-manoeuvred and out-muscled in Canberra’s halls of power by his despised rivals BHP Billiton and Rio Tinto.

The billionaire chairman of Fortescue Metals Group is seething at being snookered again by two multinationals he believes are hellbent on pushing him out of business by driving down the iron ore price.

“This won’t be the end of it — he won’t stop now,” said a close ¬associate of Forrest’s after Joe Hockey bowed to the demands of BHP and Rio by announcing on Thursday that there would be no ¬inquiry into the iron ore market.

Another was more blunt: “He will keep going — he actually believes his own bullshit.”

Sure enough, at the crack of dawn yesterday, the indefatigable Forrest hit the national airwaves from Perth in a bid to reboot his campaign, suggesting BHP and Rio had sent “plane loads” of ¬lobbyists to Canberra in recent days to convince the government to call off the planned inquiry.

Fortescue’s Andrew Forrest maintains iron ore rage – by Paul Garvey (The Australian – May 22, 2015)

May 22, 2015

http://www.theaustralian.com.au/

Fortescue Metals Group founder Andrew Forrest has vowed to continue his calls for greater scrutiny of mining giants BHP Billiton and Rio Tinto, despite the federal government’s official rejection of an inquiry into the iron ore market.

Joe Hockey yesterday declared that the inquiry — originally supported by Tony Abbott — would not go ahead, drawing an angry response from Mr Forrest.

The billionaire mining entrepreneur, who has been campaigning for months for governments to pressure BHP and Rio over their strategy to continue lifting iron ore production, said the “hysterical” lobbying of multinational mining giants caused the inquiry to stall.

In an opinion piece written for The Australian, Mr Forrest questioned what the mining giants had to fear from an inquiry.

“Those that paint me as an interventionist from behind their Singapore tax shields know the iron ore industry is an oligopoly in which the big three each wield more market power than Saudi Arabia in oil and where the barriers to entry are huge and built on decades of subsidies,” he said.

[Australia iron mining] Friends, countrymen, lend me your ores – by Richard Denniss (Brisbane Times – May 22, 2015)

May 22, 2015

http://www.brisbanetimes.com.au/

Richard Denniss is an economist and executive director of The Australia Institute.

Australia has a bigger share of the seaborne coal market than Saudi Arabia has of the world oil market. And Australia has a bigger share of the seaborne iron ore market than all of the OPEC counties combined have of the world oil market. Everyone knows that if OPEC doubled their oil supply the world oil price would fall. Yet Australians are being told that our decision to double our iron ore exports between 2007 and 2014 had no impact on the price of iron ore.

Someone is talking crap.

While it’s hard for mere mortals to turn water into wine, it’s easy to turn wine into water. Just take a glass of wine, add a very large quantity of water and, hey presto, you’ve got water. But if you add water, one drip at a time, to a glass of wine, it’s virtually impossible to decide when it stopped becoming wine and started becoming water.

So what’s watery wine got to do with the price of iron ore? Lots.

Between 2005 and 2014 Australia built or expanded almost 400 mines. Not surprisingly, doing so put enormous pressure on the cost of the labour, capital and raw materials need to build them.

Gold Fields Said to Be Among Final Bidders in Barrick Mine Sale – by David Stringer and Brett Foley (Bloomberg News – May 22, 2015)

May 22, 2015

http://www.bloomberg.com/

Gold Fields Ltd. is among final bidders competing to acquire a $400 million Australian mine from Barrick Gold Corp., people with knowledge of the matter said.

The Johannesburg-based producer and China’s Zijin Mining Group Co. submitted final offers for the Cowal gold mine in New South Wales state, according to the people, who asked not to be identified as the details are private. They are competing with local suitors Evolution Mining Ltd. and Independence Group NL, which also submitted binding bids, they said.

Barrick, the world’s biggest gold miner, said last month it has fielded interest for mines it’s seeking to divest in Australia, Papua New Guinea and Chile. The Toronto-based company plans to reduce net debt by at least $3 billion this year, partly by selling the assets and cutting staff at its head office.

Zijin Mining has also expressed interest in Barrick’s Porgera mine in Papua New Guinea, the people said. Representatives for Gold Fields, Independence Group and Evolution declined to comment, while spokesmen for Barrick and Zijin didn’t immediately respond to calls and e-mails seeking comment.

Vale iron ore deal a ‘reminder’ for Australia: Roy Hill – by Tess Ingram (Sydney Morning Post – May 22, 2015)

May 22, 2015

http://www.smh.com.au/business

Roy Hill chief executive Barry Fitzgerald has said the iron ore expansion deals Brazilian miner Vale inked with China this week are a reminder Australian producers need to remain competitive in the global iron ore market.

Mr Fitzgerald, the man responsible for the development of Gina Rinehart’s $10 billion Roy Hill mine, joined majors BHP Billiton and Rio Tinto in warning of the Brazilian iron ore producer’s growing competitiveness with its Australian rivals.

“What it does remind me, and it should remind all of us, that we in the mining industry are in a competitive, international business,” Mr Fitzgerald told a Morgans Financial breakfast in Perth on Friday. “What we do needs to reflect the pressures and the actions of our competitors.”

On Tuesday, China agreed to fund Brazilian iron ore giant Vale’s major S11D expansion and invest in huge ships that will transport high-quality ore from Brazil to Asia for a lower cost.

The project, which should be finished next year, is expected to produce 90 million tonnes of high-quality iron ore at a unit cost of $US11 a tonne. Vale also announced this month it would begin shipping a blended product – Brazilian Blend fines – with an iron content of 63 per cent.

RPT-UPDATE 2-U.S. SEC fines BHP Billiton $25 mln in 2008 Olympics bribery probe – by Jonathan Stempel (Reuters U.K. – May 20, 2015)

May 21, 2015

http://uk.reuters.com/

BHP Billiton Plc will pay $25 million to settle charges that it violated a U.S. anti-bribery law by failing to properly monitor a program under which it paid for dozens of foreign government officials to attend the 2008 Summer Olympics in Beijing.

The accord resolves U.S. Securities and Exchange Commission charges that BHP, one of the world’s biggest mining companies, violated the Foreign Corrupt Practices Act when it sponsored the attendance of officials who were “directly involved with, or in a position to influence” its business and regulatory affairs.

BHP, which has offices in London and Melbourne, Australia, neither admitted nor denied wrongdoing in agreeing on Wednesday to settle the civil case. It also said the U.S. Department of Justice ended a related criminal probe without taking action, and that all U.S. investigations into the matter are complete.

The SEC said BHP invited 176 government officials to attend the Olympics at company expense, including 98 who worked for state-owned enterprises that were customers or suppliers, under a “global hospitality” program tied to its sponsorship of the games.