Australia/New Caledonia/Papua New Guinea Mining – Page 130

Mine ruling a test of political mettle, says Rio – by Sarah-Jane Tasker (The Australian – November 14, 2013)

November 14, 2013

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

MINING giant Rio Tinto has warned that a new planning application for its Warkworth coalmine in NSW is a “litmus test” for the ability of governments to deliver regulatory results to match their economic aspirations.

The miner has been fighting to expand its coalmine in the Hunter Valley region after the Land and Environment Court put the brakes on plans earlier this year, after Rio had already received government approvals to proceed.

Rio has appealed the court decision but its chances of winning are slim, leading the miner to look to a short-term measure to keep the operation open and 1300 people in a job. The company this week lodged an application to access 350m of land to keep its production at an economic level.

Rio Tinto Coal Australia managing director Chris Salisbury said that seeking access to the extra land was the only real option Rio had to avoid further significant impacts on production and jobs. “Importantly, it will also provide us with two years to look at options for further planning approvals to provide a longer-term future for the mine,” he said.

NEWS RELEASE: What can we learn from the fate of Australia’s and Quebec’s mining tax plans?

November 8, 2013

This article was provided by the Ontario Mining Association (OMA), an organization that was established in 1920 to represent the mining industry of the province.

A recent trend in resource taxation philosophy found on both sides of the world came to light recently. It would seem both Australia at the national level in the southern hemisphere and Quebec at the provincial level in the northern hemisphere are heading in the same direction on this topic.

New Australian Prime Minister Tony Abbott and his government believe the mining tax imposed by the previous government was damaging to investment and jobs. The government is in the midst of repealing the tax, which it believes “fundamentally undermined confidence in Australia as an investment destination.”

The mining tax or “resource super profits tax” (RSPT), is a tax on any profit made by mining companies that is above 6% of their capital investment, in addition to corporate tax. Mr. Abbott’s government claims scrapping the mining tax will mean workers will be an extra $450 (Aus) a year better off. The RSPT did not net the government the tax dollars anticipated.

Iron ore miners in $65bn upswing – Matt Chambers (The Australian – November 07, 2013)

November 7, 2013

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

MORE than $65 billion has been added to the value of the nation’s iron ore miners this financial year — $2.3bn of it into Andrew Forrest’s share portfolio — as confidence grows in the strength of prices of Australia’s biggest export.

Iron ore prices remain above $US130 a tonne, outlasting expectations, as Chinese steel mills continue to buy ore and build stockpiles.

But the price increase pales in comparison to the gains of the Australian miners whose revenue depends on the steelmaking ingredient.

Since June 30, the best performing top 200 Australian stocks have been Mount Gibson Iron, up 111 per cent, Arrium, up 93 per cent, and Andrew Forrest’s Fortescue Metals Group, up 92 per cent. In the same period, Australian iron ore prices have risen just 13 per cent, illustrating the surprise around the sustained price strength.

In dollar terms, Rio Tinto and BHP Billiton will be reaping the most benefits, but their size and diversity have diluted the effect on their share prices. Since June 30, BHP is up 21 per cent, or $33bn, and Rio is up 25 per cent, or $21.7bn.

Iron ore rally boosts miners – by Peter Ker and Brian Robins (Sydney Morning Herald – November 6, 2013)

November 5, 2013

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

The four-month rally in iron ore stocks shows no sign of abating, with some miners hitting their highest share prices in more than a year this week.

Shares in BHP Billiton and Rio Tinto were on Monday fetching their highest prices since February and March respectively, while Fortescue Metals Group has not been this valuable since May 2012.

The strong rally in the sector has come after a four-month period that was supposed to be its weakest of 2013, yet saw the benchmark iron ore price refuse to slip below $US130 per tonne.

A further rise in the benchmark price to $US135 per tonne over the past 48 hours fuelled further buying on Tuesday, and pushed Fortescue shares to $5.53 for the first time in 18 months.

Fortescue shares have rallied so strongly since they were below $3 in late June that Deutsche analyst Paul Young downgraded the stock to a sell last week on the basis that it had become over-valued, particularly when compared with BHP and Rio.

Australian Iron-Ore Tycoon’s Next Bet is Nickel – by Rhiannon Hoyle (Wall Street Journal – October 31, 2013)

November 1, 2013

http://online.wsj.com/home-page

PERTH, Australia–Take an unloved commodity, land shunned by global mining companies, a large dollop of debt, and an optimistic view of Chinese demand.

This recipe helped turn Andrew Forrest into one of Australia’s richest men and transformed his company–Fortescue Metals Group Ltd. (FMG.AU)–from a tiny iron-ore explorer into the world’s fourth-largest producer of the steelmaking material in less than a decade.

Now, Mr. Forrest is betting the same strategy will work for another out-of-favor commodity: nickel.

The industrial metal used to make stainless steel has borne the brunt of a steep decline in metal prices this year, as demand fails to keep pace with the amount of material being produced by mines in countries like Australia, Russia and Canada. China’s retooling of defunct steel kilns to churn out a low-grade version of the metal–known as nickel pig iron–has also weighed on prices.

Nickel fell as low as US$13,205 a metric ton in July, half of what it fetched two years earlier and the lowest price since May 2009. At US$14,615 a ton now, it is down 14% this year, compared to a 9% fall in both industrial bellwether copper and iron ore.

US resources investor Rick Rule says most mining minnows worthless – by Matt Chambers (The Australian – October 30, 2013)

October 30, 2013

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

LONG-TIME US resources investor Rick Rule is in Australia to take advantage of what he sees as a once-in-a-decade opportunity to pick up stocks in struggling mining companies.

But the Sprott Global Resource Investments chairman has a stark message for the junior sector and its investors: most of the more than 800 junior miners listed on the Australian Securities Exchange are worthless.

“In the good times, from 2003 to 2011, the excesses here and in Canada and on (London’s secondary exchange) AIM were legendary,” said Mr Rule, in Melbourne to deliver the opening speech at today’s Mines and Money conference.

“We need to exorcise all of those sins from the system, which is a different way of saying perhaps 60 or 70 per cent of the junior listings here are truly valueless.

“One would hope that those (equity) issuers ultimately go to their intrinsic value, which is zero, and open up more space for the best 30 per cent of your issuers, the best of which are truly world class.”

Snakes, Shellfish Traps Add to Mining Hazards as Lake Reemerges – by Rhiannon Hoyle (Wall Street Journal – October 29, 2013)

October 29, 2013

http://online.wsj.com/home-page

Usually Mines Have Too Little Water; Barrick Has Too Much

SYDNEY— Garry Pearson recalls precisely when a vast lake appeared on the doorstep of one of Barrick Gold Corp.’s ABX.T -1.56% biggest mines in Australia. It was two years ago, just as gold prices hit a high-water mark.

The area’s name—Lake Cowal—hinted there was water nearby. But for most of the decade that Barrick has been exploring for gold or mining in this remote part of New South Wales state, the land was so dry that local farmers used it to graze sheep and other livestock.

Since the lake reappeared, Barrick has faced a raft of water-driven challenges ranging from a scramble to find a floating drill rig to an influx of venomous snakes.

Mr. Pearson, an environment manager whose job at Barrick includes keeping noise levels within acceptable limits, no longer drives to work but jumps into a power boat or kayak. When he reaches the monitoring station, he has to climb atop a three-meter metal chair lapped by the lakewater.

Rio Tinto Makes Hay From a Water Obstacle – by Rhiannon Hoyle (Wall Street Journal – October 29, 2013)

October 29, 2013

http://online.wsj.com/home-page

In Australia, Miner Seeks Help From Agriculture to Drill Deeper for Iron Ore

KARRATHA, Australia—In one of the driest places on Earth, mining companies like Rio Tinto PLC are grappling with a major water problem: too much of it.

As they deplete easy-to-access deposits of iron ore in Western Australia’s mineral-rich Pilbara region, big miners are spending billions of dollars to drill deeper than ever before, vying to feed Asia’s voracious appetite for raw materials. The latest prize: vast stores of ore that lie below the water table, typically located hundreds of yards beneath the Earth’s surface.

Bringing that ore to the surface would ease fears that the global economic recovery might strain mineral supplies and trigger a sharp rebound in commodity prices, potentially damping global growth.

In the remote Pilbara, which accounts for two-fifths of the world’s iron-ore exports, brisk demand, particularly from China, is creating a challenge for both miners and environmental regulators.

Country roads crumble under the weight of grain trucks – by Sarina Locke (Australia Broadcasting Corporation – October 25, 2013)

October 25, 2013

http://www.abc.net.au/news/rural/

Regional councils are fed up with the damage heavy trucks are inflicting on their roads, and they’re pointing the finger at the grain and mining industries. They claim a lack of investment in branch rail lines means more freight is travelling by road, leaving councils to foot the bill for road repairs.

At GrainCorp’s terminal at Port Kembla in NSW, 90 per cent of the grain arrives by rail, but that still leaves 10 per cent on heavy trucks through Wollongong’s suburbs.

“You only have to look at the roads and the M1, the standard of the roads buckling because of the trucks; the B-Doubles and B-triples. This is crazy stuff, these should be on rail,” said the Lord Mayor of Wollongong, Gordon Bradbury.

This coastal mayor is an ally of the central NSW councils like Cowra, who are developing a public/private partnership project to restore a 220-kilometre freight rail line.

A restored inland track would link with another rail line to the coast, taking heavy freight away from the Blue Mountains and the South Coast commuter train network.

COLUMN-Australia, Indonesia, Mozambique’s take different commodity paths – by Clyde Russell (Reuters India – October 25, 2013)

October 25, 2013

http://in.reuters.com/

LAUNCESTON, Australia, Oct 25 (Reuters) – Australia, Indonesia and Mozambique appear quite disparate countries, but they all have one thing in common insofar as they want to supply Asia with large volumes of coal and liquefied natural gas.

But the paths being taken by the three governments in pursuit of this are vastly different, and will ultimately decide which nation is most successful in using its natural resources to its best advantage.

Perhaps the most stark contrast is between neighbours Australia and Indonesia, which are pursuing almost polar opposite policies.

Australia’s new Liberal-led government introduced legislation on Oct. 24 to scrap a tax on super profits from mining coal and iron ore.

This was part of a pledge made before the September general election that a Liberal administration would get rid of the Mineral Resource Rent Tax (MRRT), the carbon tax and cut red and green tape for natural resource projects.

It’s part of new Prime Minister Tony Abbott’s message that Australia, the world’s largest coal, iron ore and soon to be LNG exporter, is once again open for business after six years of Labor Party rule that saw a raft of new taxes introduced.

BHP’s outlook optimistic, AGM hears – by Matt Chambers (The Australian – October 24, 2013)

October 24, 2013

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

BHP Billiton says the global economy is picking up, with positive signs in the US and Japan, boding well for plans to drive an 8 per cent increase in overall production over the next two years and for shareholders hoping for capital returns.

In the company’s annual general meeting in London tonight, BHP chairman Jac Nasser and recently installed chief executive Andrew Mackenzie gave an optimistic outlook for global growth and the demand for the iron ore, petroleum, copper and coal that BHP produces.

“The (2012-13) period was challenging, with slowing global growth and weaker commodity markets,” Mr Mackenzie told the first BHP annual general meeting he has fronted as chief executive since taking over from Marius Kloppers this year.

“However, we are already seeing signs of recovery in the global economy.” Mr Mackenzie said a productivity drive pursued by the miner in the wake of shareholder calls for restraint as Chinese growth slowed last year was paying off.

BHP was now confident of boosting production by 8 per cent, based on converting all its production to copper equivalent, over the next two years, he said.

COLUMN-BHP, Rio Tinto show commodity game has changed – by Clyde Russell (Reuters U.S. – October 23, 2013)

October 23, 2013

http://www.reuters.com/

Clyde Russell is a Reuters market analyst. The views expressed are his own.

LAUNCESTON, Australia, Oct 23 (Reuters) – The latest production reports by Anglo-Australian mining giants BHP Billiton and Rio Tinto show just how much the commodity market has changed in the past year.

BHP and Rio’s quarterly statements underline that mining is now a game of producing the highest volumes at the lowest costs, while at the same time scaling back on spending.

This seems like a logical response to concerns over slowing demand growth from top consumer China, whose appetite for commodities drove a decade-long boom in developing projects to boost supply.

The jury is still out on whether the major resource companies stopped spending in time to avoid a major bust in commodity prices, or whether new supply still in the pipeline will deliver a crashing end to the China-led boom. Certainly both BHP and Rio made much of their efforts to boost volumes at lower costs, while scaling back capital expenditure.

Before he was a billionaire, Andrew ‘Twiggy’ Forrest ran with a colourful crowd – by Paul Garvey (The Australian – October 23, 2013)

October 23, 2013

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

BEFORE he became the nation’s greatest philanthropist, Andrew Forrest was a fast-talking salesman who borrowed millions of dollars from a convicted drug dealer and employed disgraced former West Australian premier Brian Burke to help him smash the BHP Billiton-Rio Tinto duopoly in the Pilbara iron ore industry.

Mr Burke, a lobbyist and former close adviser to Mr Forrest, boasts in a new book to be published next week that he was able to lean on bureaucrats and MPs to have key legislation passed for the entrepreneur in just a few months, despite the process normally taking 18 months.

Twiggy: The High-Stakes Life of Andrew Forrest, by Andrew Burrell, a Perth-based journalist with The Australian, also details how four judges in four separate court cases have questioned the businessman’s ethics and truthfulness during his colourful career. Mr Forrest rejected repeated approaches to co-operate with Burrell and to respond to claims made by others in the book.

The unauthorised biography investigates how Mr Forrest transformed himself, through boundless energy and cunning, from a corporate pariah after being removed as chief executive of Anaconda Nickel in 2001 into one of Australia’s most successful entrepreneurs and a philanthropist who is feted by the establishment.

BHP raises iron ore target as Australian expansions accelerate – by James Regan (Reuters India – October 22, 2013)

October 22, 2013

http://in.reuters.com/

SYDNEY – (Reuters) – Global miner BHP Billiton (BHP.AX) upgraded its iron ore production target for fiscal 2014 while petroleum output hit a quarterly record, as it ramps up output to capture more of a slower-growing market for raw materials.

Iron ore benefited from multi-billion-dollar expansion work underway in Australia that will lift fiscal 2014 output to 212 million tonnes, up from a previous target of 207 million, BHP (BLT.L) said in its fiscal first-quarter production report.

In petroleum, liquids output rose 16 percent, helped by a shift in focus at its U.S. shale holdings to focus more on oil production as U.S. gas prices sag.

BHP has warned mining companies face slowing demand growth for raw materials from China and elsewhere requiring greater emphasis on economies of scale to keep costs down.

The world’s biggest mining company has already cut planned spending for 2013/14 by 25 percent to $16 billion, and has earmarked a further decline for the following year.

Mining group Eramet plans more savings as nickel stays weak – by by Gus Trompiz (Reuters India – October 21, 2013)

October 21, 2013

http://in.reuters.com/

PARIS – Oct 21, 2013 (Reuters) – Eramet on Monday said it would step up cost saving measures to counter the effects of a depressed nickel market, which contributed to a five percent fall in the mining group’s third quarter sales.

Benchmark prices of nickel, mainly used in stainless steel, sank to a four-year low in July due to poor industrial demand and rising stocks, leaving a swathe of global production operating at a loss.

Eramet reported a 5 percent year-on-year fall in third-quarter sales to 754 million euros ($1.03 billion), which included a 23 percent decrease for its nickel division.

“The Group is stepping up its measures to decrease its costs and capital expenditure, adjust its productions to its markets and reduce its working capital requirements,” Eramet said in a statement, without giving details.

The company reiterated that current operating profit in the second half would be “significantly lower” than in the first half, when Eramet reported a 9 million euro loss.