Australia/New Caledonia/Papua New Guinea Mining – Page 97

Australia needs policy reform to milk $9.5 billion uranium cash cow, report argues – by Frank Chung (News.com.au – October 20, 2015)

October 20, 2015

http://www.news.com.au/finance/

AUSTRALIA is sitting on a figurative gold mine of literal uranium, with a massive untapped opportunity to unlock an export boom and add thousands of jobs to the economy, a new report has argued.

The study, commissioned by the Minerals Council of Australia and conducted by RMIT University economists Sinclair Davidson and Ashton de Silva, found that under the right conditions, Australian uranium could generate as much as 5 per cent of the world’s electricity.

“This would be an outstanding contribution to global low-emissions electricity generation,” Minerals Council uranium executive director Daniel Zavattiero said.

Australia is sitting on about 30 per cent of the world’s uranium reserves but produces only 10 per cent of global production, making us the world’s third-largest exporter behind Kazakhstan and Canada.

The authors argue that, under the right policy settings, Australia’s could bring its share of global supply closer to 30 per cent.

UPDATE 2-Rio Tinto lifts iron ore shipments despite China risks, draws on inventory – by James Regan (Reuters U.S. – October 16, 2015)

October 16, 2015

http://www.reuters.com/

SYDNEY, Oct 16 (Reuters) – Rio Tinto on Friday posted a 17 percent rise in third-quarter iron ore shipments and said it was on track to meet a full-year target of 340 million tonnes, shrugging off risks from slower economic growth and peaking steel output in China.

In a sign market conditions may be improving, the miner dipped into its inventories – 4 million tonnes from its Australian operations and 1 million from the Canadian business – after production fell short of shipments.

Rio Tinto shipped 91.3 million tonnes over the quarter, outstripping production of 86.1 million tonnes, data from the company’s quarterly production report showed.

“Clearly, the iron ore market is reasonably tight,” said Shaw Stockbroking mining analyst Peter O’Connor in a note to clients.

Gina Rinehart scores WA royalties win against mining major Rio Tinto (The Australian – October 14, 2015)

October 14, 2015

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

BILLIONAIRE Gina Rinehart has had a multi-million dollar High Court win against mining giant Rio Tinto.

The High Court of Australia ruled that Rio Tinto subsidiary Mount Bruce Mining (MBM) is liable to pay royalties to Ms Rinehart’s Hancock Prospecting and joint venture partner Wright Prospecting in relation to iron ore mined in the Eastern Range and Channar areas of the Pilbara in Western Australia.

The High Court dismissed an appeal from the NSW Court of Appeal in relation to a tenement sale agreement reached in 1970 between Ms Rinehart’s father Lang Hancock and his business partner Peter Wright about the payment of royalties by MBM.

Rio Tinto temporarily lost control of the tenements and later regained control to mine the rich iron ore region. The sale made Ms Rinehart the richest woman in Australia and one of the richest people in the world.

X2 Said to Be Last Remaining Bidder for Rio Australia Mines – by Brett Foley, Dinesh Nair and Thomas Biesheuvel (Bloomberg News – October 12, 2015)

October 14, 2015

http://www.bloomberg.com/

X2 Resources, the private-equity firm founded by former Xstrata Ltd. chief Mick Davis, has emerged as the last remaining bidder for control of two Rio Tinto Group coal mines in Australia, people with knowledge of the matter said.

X2 is progressing in negotiations with Rio as the other interested parties, including Glencore Plc and New Hope Corp., are no longer in talks to buy the assets in New South Wales state’s Hunter Valley region, according to the people. The mine stakes may fetch more than A$3 billion ($2.2 billion), one of the people said, asking not to be identified because the talks are private.

Rio Chief Executive Officer Sam Walsh has sold $4.5 billion of less-profitable assets since January 2013, reducing its coal portfolio amid falling prices in order to focus on larger iron ore and copper operations. Any deal would be the first purchase for Davis’s X2 fund since he raised several billion dollars from investors to pursue mining acquisitions.

New Hope, which agreed last month to buy Rio’s 40 percent stake in the Bengalla coal venture in Australia for $606 million, isn’t pursuing the other mines Rio is selling in the country, according to the people.

Glencore to sell copper mines in Australia, Chile – by OLIVIA KUMWENDA-MTAMBO AND SONALI PAUL (Reuters U.K. – October 12, 2015)

October 13, 2015

http://uk.reuters.com/article/

LONDON/MELBOURNE – Glencore (GLEN.L) plans to sell copper mines in Australia and Chile as the mining and trading company aims to reduce a debt burden accumulated in an asset buying spree that has shaken confidence in the Swiss-based firm.

Selling assets is one element of a broad plan to cut about a third of Glencore’s $30 billion (19.6 billion pounds) net debt and to regain the trust of investors after its shares tumbled to record lows this year amid weak global commodity prices.

Glencore said it would sell its wholly-owned Cobar copper mine in Australia and Lomas Bayas copper mine in Chile after receiving interest from potential buyers.

“This will allow potential buyers to bid to purchase either one or both of the mines and may or may not result in a sale,” Glencore said in a statement on Monday.

A London-based analyst said the Cobar and Lomas Bayas mines together could fetch less than $300 million as they are very small.

BHP Billiton exec talks up Nickel West prospects – by Barry Fitzgerald (The Australian – October 9, 2015)

October 9, 2015

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

BHP Billiton has served up a surprise by talking up the prospects of its Nickel West division in the face of depressed prices for the stainless steel ingredient.

Nickel West is the price-challenged division BHP withdrew from sale last year after failing to attract reasonable offers, and it is the division that was not good enough to be included with the other non-core assets spun off by BHP into South32 earlier this year.

Because Nickel West was seen internally as doubly non-core to BHP, it was to be run for cash and would not receive new investment, raising fears that the once proud business — spawned during the Poseidon nickel boom and a cornerstone of BHP’s 2005 acquisition, WMC — would be left to wither on the vine.

But at the Australian Nickel conference in Perth, Nickel West’s new asset president, Eddy Haegel, said there was a now sense of “nervous excitement’’ in the division. He said Nickel West had embarked on a journey to reinvent itself by adopting a junior miner mindset, while remaining inside the world’s biggest mining company.

Glencore’s pursuit of Rio Tinto has come full circle – by Peter Kerr (Sydney Morning Herald – October 8, 2015)

October 8, 2015

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

It was supposed to be the year that advanced Ivan Glasenberg’s plans for global domination of the commodities sector.

But the year since Rio Tinto rebuffed merger overtures from Glasenberg’s Glencore, which was marked on Thursday, has become the South African entrepreneur’s annus horribilis.

Not only did the merger, seen by some as inevitable and by others as unlikely, not come to fruition, but the process prompted the market to compare the two companies thoroughly. That comparison has not flattered Glencore.

The merger approach came amid the peak of the iron ore crisis – prices had fallen by 44 per cent in 12 months, and Glasenberg had whipped up a debate about both Rio Tinto’s reliance on the bulk commodity and its controversial strategy of continuing to expand exports into weak markets.

Glasenberg, on the other hand, portrayed himself as the commodities guru with the better-placed, more-diversified portfolio that had an oil hedge and exposure to the base metals that most predicted would shine in 2015.

Nickel crisis rocks French islands in Pacific – by Claudine Wery (AFP/Yahoo.com – October 4, 2015)

October 5, 2015

https://en-maktoob.news.yahoo.com/

Plunging nickel prices and the market woes of world mining giants have shaken the French territory of New Caledonia, a tropical archipelago in the Pacific that is hostage to the metal’s fortunes.

Though best known for its stunning lagoon, pristine beaches and diverse wildlife, New Caledonia’s economy actually relies heavily on nickel, discovered here in the 19th century.

The price of nickel — essential to the manufacture of stainless steel — has plunged 35 percent so far this year to a six-and-a-half year low of less than $10,000 (9,000 euros) a tonne.

A slowdown in economic growth in China, the world’s biggest consumer of nickel, and stockpiles of the metal amounting to more than 450,000 tonnes, have depressed the market.

“We were already in a deteriorating situation when the crisis hit because every sector was in a slowdown. I think we are not far from zero economic growth,” Catherine Wehbe, director of the employers’ federation Medef in New Caledonia, told AFP.

COLUMN-Australia takes cautious, maybe premature, bullish iron ore view – by Clyde Russell (Reuters U.S. – October 1, 2015)

October 2, 2015

http://www.reuters.com/

Oct 1 (Reuters) – – It’s a brave analyst these days who would call a bottom in the iron ore price, which makes the call for better times by 2017 from the normally cautious Australian government forecaster all the more interesting.

While any forecast for iron ore prices to rise is worth more than just a glance, there are a few things to note about the Australian Department of Industry’s Resource and Energy Quarterly, published on Wednesday.

The most important is that the government forecaster isn’t calling for a dramatic rebound in iron ore, rather for modest gains.

The second is that the recovery isn’t expected until 2017, with next year expected to show further losses for the steel-making ingredient. The report projected that iron ore will rise to average $60.40 a tonne in nominal terms in 2017, up from $51.20 in 2016 and $52.90 this year.

By way of comparison, the department’s June quarter report forecast iron ore would average $54.40 a tonne in 2015 and $52.10 in 2016, but didn’t provide forecasts for further out years.

Chief Economist indicates the bottom of the mining bust – by Cole Latimer (Australian Mining – October 2, 2015)

October 2, 2015

http://www.australianmining.com.au/

A report from the Department of Industry Innovation and Science’s Office of the Chief Economist states the bottom of the mining bust is here.

The report outlined an overall drop of around 12 per cent in Australia’s resources export earnings year on year, noting the commodity price decline playing a large part in the overall export earnings decline.

However the Department is still positive on the industry, recognising the shift from a capital and investment heavy construction boom into a period of production.

“Australian producers were well-positioned to meet the projected growth in demand as production starts to increase following a long period of investment,” the report said.

“The Australian resources and energy sector is transitioning decisively into the production phase of the resources boom,” the Department’s Chief Economist Mark Cully added.

Iron Ore Seen Below $40 by Citi as Roy Hill `Whale’ Starts – by Jasmine Ng (Bloomberg News – September 28, 2015)

October 2, 2015

http://www.bloomberg.com/

New supply from Gina Rinehart’s Roy Hill iron ore mine will contribute to a slump below $40 a metric ton next year, according to Citigroup Inc., which said lower steel output in China would also hurt the commodity.

The project in Australia’s ore-rich Pilbara is poised to start shipments in October, and its expansion toward annual output of 55 million tons will probably have a large impact on prices, analysts including Ivan Szpakowski said in a report. Surging production will combine with steel-output cuts in China to push prices below $40 in the first half, Citigroup said.

Iron ore’s retreated 20 percent this year on rising low-cost output and faltering demand growth in China, and the addition of the new cargoes from Roy Hill to the global seaborne market may add to oversupply.

Roy Hill Holdings Pty Ltd. Chief Executive Officer Barry Fitzgerald told reporters in China last week the project is on target to achieve full capacity over 15 months. Citigroup described the new mine in the report on Monday as an “impending whale” that would ship almost all of its output to China.

Aborigines have a right to economic development – by Wayne Bergmann (The Australian – September 30, 2015)

September 30, 2015

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

In his victory speech, new Prime Minister Malcolm Turnbull announced: “There has never been a more exciting time to be alive than today and there has never been a more exciting time to be an Australian. We will ensure that all Australians understand that their government recognises the opportunities of the future.”

If federal, state and territory governments are to ensure that Aboriginal Australians are included in these “opportunities of the future”, it is obvious their first priority should be to support the economic initiatives of Aboriginal people.

Remarkably, some governments do not understand this. Take the most recent Queensland state governments.

On Cape York Peninsula near Aurukan, there’s $20 billion worth of bauxite waiting to be mined. The traditional owners of the area, the Wik and Wik Way people, eager to be part of the economic development of their region, formed a joint venture with an Australian mining company to create Aurukan Bauxite Developments and planned to mine the resource.

Australian Mining Sector’s Future Is Still Bright, Resources Minister Says – by Rob Taylor (Wall Street Journal – September 28, 2015)

September 29, 2015

http://www.wsj.com/

CANBERRA, Australia—Australia’s new resources minister says he is upbeat about the future of the country’s mining sector, despite slumping resource prices and accelerating efforts among major nations, including China, to combat climate change by curbing fossil-fuel emissions.

Josh Frydenberg, appointed resources and energy minister by Prime Minister Malcolm Turnbull in a cabinet shake-up last week, said he was confident there would be strong appetite for high-quality Australian thermal coal and LNG gas exports for decades, despite competition from cleaner wind and solar technologies.

“I’m very positive about the renewable energy space; I’m very positive about the opportunities for further investment. I’m very positive about the increasing demand for Australia’s natural resources and energy sector,” Mr. Frydenberg said in an interview on Monday.

The U.S. and China last week announced major steps to fight climate change, including a pledge by China to launch emissions trading by 2017, while India this week is expected to set an ambitious target for up to 40% renewable power by 2030 and emissions cuts of 35% on 2005 levels by 2030.

Rio Tinto and BHP Billiton to keep dividends despite pressure, says Macquarie – by Stephen Cauchi (Australian Financial Review – September 28, 2015)

September 28, 2015

http://www.afr.com/

BHP and Rio Tinto would have to trim their dividends in coming years due to crashing commodity prices, according to research released on Monday by Macquarie, with Rio tipped to be the better performer of the two.

Both companies remain committed to progressive dividend policies, in which dividends rise in line with earnings per share. The dividends would continue, said Macquarie. But the bank nevertheless trimmed its forecasts for both companies.

For BHP, “we now only factor a flat payment of $US1.24 a share for the next three years, a payment of $US6.5 billion”.

For Rio, “we have reduced our dividend growth assumptions … with our dividend compound annual growth rate reducing from 4 per cent to 2 per cent over the next three years.”

BHP’s dividend per share in 2015, averaged over 12 months, was $1.68. Rio’s interim 2015 dividend per share was $1.44.

Coal prices turn off investors – by Amanda Saunders (Sydney Morning Herald – September 25, 2015)

September 25, 2015

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

First it was tobacco, then alcohol, gambling, then asbestos. Sugar might also be on the nose for investors. But right now it is hard to find a more loathed sector than coal.

Not only are the forces of environmentalists lining up against the commodity. But there seems to be no end in sight for depressed prices.

The gas industry turned rogue on their counterparts in coal a few months ago too, attacking the industry in a bid to position itself as a cleaner source of energy.

And in a fresh kick in the guts, news broke out from the United States on Friday that Chinese President Xi Jinping was preparing to announce a cap-and-trade scheme to curb emissions as part of a climate deal with the US, ahead of climate talks in Paris in December.

China is Australia’s biggest coal customer and as China and US face off in a climate change battle, the commodity is likely to be a victim.