Australia/New Caledonia/Papua New Guinea Mining – Page 92

US miner Cliffs says big Australian miners should regret their dividend promises – by Peter Ker (Sydney Morning Herald – January 28, 2016)

January 28, 2016

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

Big miners are now feeling the consequences of their own behaviour and should regret their vow to continue growing dividends, according to the outspoken boss of loss-making US miner Cliffs.

In his latest tirade against the iron ore growth strategies of BHP Billiton and Rio Tinto, Cliffs president Lourenco Goncalves said pressure was rising on those who devised plans to continue growing iron ore exports.

“These companies are now realising that the returns on investment that they promised to their respective boards have not been achieved and will not materialise,” he said on Thursday.

Nickel price bloodbath in Western Australia as Mincor, Panoramic announce closures – by Tess Ingram (Sydney Morning Herald – January 27, 2016)

January 27, 2016

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

The sustained decline in the nickel price has forced three more West Australian operations into suspension at the cost of more than 100 jobs, as the toll of the price crash mounts.

On Wednesday, Panoramic Resources said the weak and uncertain nickel price had forced it to gradually suspend operations at its Savannah mine in Western Australia’s Kimberley region ahead of last shipments and a full care and maintenance position during April.

It came as Mincor Resources confirmed it would cease mining at its Mariner and Miitel mines, both in the historic Kambalda nickel district, at the end of the month “for a period of suspension until the nickel price recovers”.

Vale Port Halt Spurs Iron Rally Amid Trade Disruption Fears – by Yasmine Batista and Jasmine Ng (Bloomberg News – January 22, 2016)

January 22, 2016

http://www.bloomberg.com/

The global iron ore trade may be disrupted after Vale SA, the largest producer, was ordered by a Brazilian court to temporarily close one of its main ports following alleged environmental breaches. Prices of the raw material gained along with miners’ shares.

The court in Brazil’s Espirito Santo state ordered a halt to export and import activities through Tubarao after elevated levels of iron ore and coal dust were detected.

Vale received the news from federal police “with surprise” and will use “all appropriate legal measures to ensure the re-establishment of its activities,” its said in a statement Thursday.

Iron ore has plunged over the past three years as the world’s top producers including Vale and rivals BHP Billiton Ltd. and Rio Tinto Group in Australia boosted low-cost supply, spurring a glut just as China’s growth cooled.

[New Caledonia] Island of Nickel Losing Money as World’s Mines Shun Output Cuts – by Jesse Riseborough and Agnieszka De Sousa (Bloomberg News – January 22, 2016)

January 22, 2016

http://www.bloomberg.com/

On a remote island in the Pacific Ocean, mine owners like Glencore Plc and Vale SA are losing money on every ton of nickel they unearth in what amounts to a contest to see who can endure the agony longer.

A prolonged surplus of nickel has sent prices plunging to a 12-year low and below the cost of production for more than two thirds of the world’s mines.

Nowhere is the strain more acute than in New Caledonia, a former Napoleonic penal colony 1,000 miles from Australia’s eastern coast that drew billions of dollars in investment when the metal reached a record before the financial crisis. Now, an island with 15 percent of the planet’s reserves has become a cautionary tale for an industry unwilling to curtail supply.

Luck bottoms out for Australian mining magnate Clive Palmer – by Melanie Burton (Reuters U.S. – January 21, 2016)

January 21, 2016

http://www.reuters.com/

MELBOURNE Jan 21 Larger-than-life mining magnate Clive Palmer was riding a boom in mineral prices less than two years ago and had become one of Australia’s most influential politicians.

Now, rattled by a slide in commodity prices, the colourful and often controversial tycoon’s grip on parts of his business empire is crumbling and his political ambitions have also been dented by defections in the party he created.

Other Australian mining magnates such as Gina Rinehart, one of Asia’s richest women, and Andrew “Twiggy” Forest have also seen their fortunes plummet. Palmer’s problems came to a head this week when his embattled Queensland Nickel (QNI) refinery called in administrators after sacking more than 200 workers.

Iron Ore Mining Giants Cool Supply Growth as Next Wave Builds – by David Stringer and Jasmine Ng (Bloomberg News – January 19, 2016) http://www.bloomberg.com/

January 20, 2016

http://www.bloomberg.com/

The surge in output from Australia’s two biggest iron ore producers is slowing as they complete $24 billion in expansions wagered on increasing demand from China’s mills. As steel output declines in China, the next wave of supply from miners who’ve made the same bet is likely to keep prices under pressure.

While Rio Tinto Group and BHP Billiton Ltd., the world’s No. 2 and No. 3 exporters, predict supply growth will slow this year, iron ore’s collapse may not reach its nadir until 2017 as material continues to be added from new operations in Brazil and Australia, according to CRU Group.

The consultancy estimates average benchmark iron ore will remain broadly flat over the next two years at around $40 a metric ton. The steelmaking ingredient trades at less than a quarter of its 2011 peak, and last month touched a new low of $38.30 in daily prices dating to 2009.

Rio Tinto eases off its iron ore expansion – by Matt Chambers (The Australian – January 20, 2016)

January 20, 2016

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

Rio Tinto has signalled it will temporarily take its foot off the iron ore production accelerator this year, issuing below-expectation guidance that raises doubts about recent West Australian production targets.

The guidance, a surprise inclusion in Rio’s December-quarter production report yesterday, comes as iron ore prices languish near $US40 a tonne after suffering a 70 per cent drop during 2014 and 2015.

The dual-listed mining giant yesterday said it planned to produce 350 million tonnes of iron ore this year from its Pilbara region and Canadian iron ore mines (including the equity share of its partners), up from 327 million tonnes last year but down on market expectations of 355 million tonnes.

Mining giant BHP pessimistic on iron ore, coal prices in next few years – by Sonali Paul (Reuters U.S. – January 20, 2016)

January 20, 2016

http://www.reuters.com/

MELBOURNE – BHP Billiton flagged on Wednesday that it sees no recovery in iron ore or coal prices in the next few years, while holding out hope for a rebound in copper and oil as it fights slumping earnings set to hit its long-protected dividend.

The top global miner reinforced the bleak outlook for most commodities in the near term, with markets slammed by oversupply as the economy slows in China, the world’s biggest metals consumer.

In a sign the company may cut its dividend, ending a long-held policy to maintain or raise its payout every year, BHP Chief Executive Andrew Mackenzie said in a quarterly production report that it was focused on defending its investment grade credit rating.

Australia’s Small Mining Towns Are Running Out of Water – by James Paton (Bloomberg News – January 18, 2016)

January 19, 2016

http://www.bloomberg.com/

The Australian mining town of Broken Hill is preparing for a future that doesn’t depend on silver and zinc, but there’s one resource it won’t be able to live without: water.

The prospect of that commodity running out has sparked concern in the remote community more than 1,110 kilometers (680 miles) west of Sydney. The city of 19,000 people exhausted its supply of water that can be treated conventionally, forcing it this month to turn on a desalination plant to process the salty remains. Water flowing into the Menindee Lakes, the city’s key source, is at a record low amid an El Nino-induced drought.

Broken Hill’s plight underscores the vulnerability of Australia, the world’s driest inhabited continent, and the investment needed to secure water for Outback communities.

Rio Tinto continues to push up iron ore output – by Renée Schultes (Financial Times – January 19, 2016)

January 19, 2016

http://www.ft.com/

Sydney – Rio Tinto increased production of iron ore 11 per cent last year to a new record and is forecasting a further 6.8 per cent rise to 350m tonnes in 2016, despite the collapse in the price of the key steel ingredient.

Sam Walsh, chief executive of the Anglo-Australian miner, which last week said it would freeze pay for all staff this year, on Tuesday acknowledged the challenging market. He said the company would “continue to focus on disciplined management of costs and capital to maximise cash flow generation throughout 2016”.

The world’s second-largest iron ore producer shipped 336.6m tonnes of iron ore last year after mining 327.6m tonnes and selling 9m tonnes from stockpiles. It said bulk inventories were now largely exhausted.

Clive Palmer Under Pressure From Commodity Prices – by Rhiannon Hoyle (Wall Street Journal – January 18, 2016)

January 18, 2016

http://www.wsj.com/

SYDNEY— Clive Palmer’s resources bets helped to underpin an empire that ranged from animated dinosaur parks to a political party that held the balance of power in Australia’s upper house.

Now, the entrepreneur’s wealth is being squeezed by the downturn in commodity prices.
On Monday, Mr. Palmer lost control of one of his biggest investments in the metals sector when insolvency specialists took charge of a refinery that processes nickel ore in Australia’s tropical Queensland state.

Queensland Nickel, which Mr. Palmer had bought years earlier from BHP Billiton Ltd., has been struggling to turn a profit due to plunging prices of the industrial metal and was recently refused a government bailout. Job cuts equivalent to a quarter of its workforce, made as recently as Friday, failed to keep the company afloat.

An ugly start to what may be a brutal year for nickel producers – by Andy Home (Reuters U.S. – January 14, 2016)

January 18, 2016

http://www.reuters.com/

LONDON – If the first two weeks are anything to go by, this is going to be an ugly year for nickel producers. Canada’s Sherritt International and Japan’s Sumitomo Corp have just announced massive write-downs against their Ambatovy nickel assets in Madagascar.

The total impairment will be $2.4 billion on a 100 percent basis, according to Sherritt, based on a long-term nickel price of $8.50 per lb, or around $18,400 per tonne.

It’s a hugely disappointing outcome for both companies and their shareholders given the $5.5 billion Ambatovy project is only now approaching nameplate capacity after a lengthy three-year ramp-up.

Lithium, graphite and potash to shine in 2016 as battery storage, electric car demand grows along with food – by Babs McHugh (Australian Broadcasting Corporation – January 13, 2016)

May 13, 2016January 14, 2016

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

The price of lithium has surged on the back of growing global demand for high-tech devices, storage batteries and electric cars.

Lithium Australia recently took advantage of the positive sentiment by completing a $6.55 million share placement during one of the worst weeks in trading history.

It is a stark contrast to a major price drop in key bulk mineral commodities like coal and iron ore. Managing director Adrian Griffin says the demand for lithium will only grow, especially for lithium-ion batteries.

“I think we’re talking about a paradigm shift in the way people think about power,” Mr Griffin said.

Rio Tinto freezes salaries but CEO Sam Walsh believes it can thrive – by Amanda Saunders (Australian Financial Review – January 14, 2016)

January 14, 2016

http://www.afr.com/

Barely two weeks into 2016, and predictions of an even tougher year in mining than the last are, so far, on point.

But for iron ore giant Rio Tinto there could be a silver lining of sorts in what is shaping to be an ugly 12 months.

Chief executive Sam Walsh says the carnage could provide opportunity for Rio to widen the gap against its fellow majors. “Rio Tinto can thrive when others falter,” Mr Walsh said in a note to staff.

For Rio staff, the new year started with an email this week from Walsh that put a global pay freeze in place across the company. Rio is going to get stricter on expense management, and further cut what it spends on consultants and contractors.

Iron Ore Slump Threatens $2 Billion Australian Mine – by David Stringer (Bloomberg News – January 12, 2016)

January 12, 2016

http://www.bloomberg.com/

The plunge in the price of iron ore looks set to claim another casualty with Gindalbie Metals Ltd. questioning its future, as partner Anshan Iron and Steel Group Corp. considers withdrawing funds for their $2 billion mine.

Anshan engaged a third party to assess the viability of its Karara iron ore mine in Western Australia amid the steel making material’s price collapse, according to a statement from Gindalbie.

Shares in the Perth-based company slumped 57 percent to a record low of 0.9 cents in Sydney, giving it a market value of A$13.5 million ($9.4 million) compared with A$780 million at the end of the 2011 fiscal year.