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Ecuador Says BHP, Billionaire Rinehart Join Metals Chase – by David Stringer (Bloomberg News – November 8, 2016)

http://www.bloomberg.com/

BHP Billiton Ltd., the world’s largest miner, and billionaire Gina Rinehart’s Hancock Prospecting Pty. are among commodity producers to have held talks over a potential entry into mining and exploration projects in Ecuador, according to the nation’s government.

Both producers had discussions with officials on the prospects of making investments or securing exploration leases, Mining Minister Javier Cordova Unda said Tuesday in an interview in Melbourne. Cordova has met with BHP personally, he said.

BHP has shown interest in a number of copper projects, including in a potential partnership with state-owned miner Enami and Chile’s Codelco in their joint Llurimagua copper and molybdenum project, Cordova said. Fortescue Metals Group Ltd.

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Major mining assets change hands after commodity rout (Reuters U.s. – November 8, 2016)

http://www.reuters.com/

Major miners are selling assets after a global commodities rout last year left them with high levels of debt. A recovery in raw materials prices has taken away some of the pressure to sell, however, and deals have slowed.

China, whose stimulus package spurred this year’s commodities rally, is the biggest potential buyer. Following is a list of the main mining companies, some of the biggest sales so far and what assets are on offer:

BHP BILLITON LIMITED

Market capitalization: 72.7 billion pounds ($90.3 billion)(Reuters data)

Net debt: $26.1 billion (company reported in August)

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BHP Billiton one year on from the Samarco Fundão dam disaster – by Peter Ker (Australian Financial Review – November 2, 2016)

http://www.afr.com/

Andrew Mackenzie was rushing towards South America when he took a call from an old friend. A dam failure had killed scores of people at a BHP site in Brazil just days earlier, and there was little time for social calls.

But the BHP chief executive made an exception for Tony Hayward’s call. The two men had been friends for more than two decades, having spent a significant part of their careers at BP, where Hayward was the much-maligned chief executive who wished he could “get his life back” during the 2010 Deepwater Horizon oil spill in the Gulf of Mexico.

Upon hearing of the dam collapse at BHP and Vale’s Samarco iron ore business, Hayward felt there were messages his friend had to hear. Mackenzie had already won plaudits for fronting the media in Melbourne within 12 hours of the dam spill on November 6, 2015, despite confusion reigning at the time amid the darkness of night in Brazil.

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There’s an $8 Billion Iron Ore Quandary Ahead for Top Miners – by David Stringer (Bloomberg News – November 2, 2016)

http://www.bloomberg.com/

The world’s biggest iron ore miners are warning that prices are set to decline — just as they need to begin spending as much as $8 billion developing new mines to keep their best cash machines ticking over.

Over the next five-to-10 years, the miners need new production to replace almost 170 million tons of capacity that’ll be lost as exhausted pits are closed and grades decline at aging operations, according to Global Mining Research Ltd. Even with forecasts that demand for seaborne supply will peak in 2018 and prices may drop below $40 a ton that year, new iron ore projects are seen offering better returns than some alternative investments.

“Economically, it still makes a lot of sense to invest that level of capex, given the returns that these mines are likely to generate,” said Michelle Lopez, a Sydney-based investment manager at Aberdeen Asset Management Ltd., which holds BHP Billiton Ltd. and Rio Tinto Group shares and globally manages $403 billion.

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Vale cuts waste storage spending after disaster at BHP joint venture – by Paul Kiernan (The Australian/Dow Jones – November 1, 2016)

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

Brazilian mining giant Vale SA has slashed spending on waste storage even after a catastrophic dam failure at its Samarco joint venture with BHP Billiton last November killed 19 people and triggered tens of billions of dollars in lawsuits.

Vale, the world’s largest producer of iron ore and nickel, reduced maintenance capital expenditures on waste dumps and tailings dams by 51 per cent in the first nine months of 2016 from the year-ago period to $US86.7 million, according to its financial statements. That followed similarly large cuts in 2014 and 2015 as Vale doubled down on belt-tightening measures in a bid to shore up cash reserves and pay down debt amid the commodity downturn.

In an emailed statement, Vale said its 2014 spending was elevated in part by the construction of a large tailings dam at its Brucutu mine in Brazil, while subsequent investment in new dams was slowed by licensing delays. Vale also said it has been shifting to high-grade ore that can be processed without water and therefore doesn’t require tailings dams, though it uses this method for only 40 per cent of iron-ore output at present.

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Why Electric Cars Excite the World’s Biggest Mining Company – by Chisaki Watanabe (Bloomberg News – November 1, 2016)

http://www.bloomberg.com/

BHP Billiton Ltd., the world’s biggest miner, is hot for electric vehicles. The Melbourne-based resources giant, which mines metals and coal used for both steelmaking and fueling power plants, is increasingly optimistic that there’ll be a surge in demand for some of its products as consumers opt for electric vehicles, or EVs, and other renewable energy technologies.

“As you see more renewables and EVs, we also will see an impact on copper demand,” Fiona Wild, BHP’s vice president, sustainability and climate change, said Tuesday at a conference in Shanghai hosted by Bloomberg New Energy Finance.

“EVs at the moment have about 80 kilograms of copper in them. As they become more efficient, you see a greater amount of copper in those vehicles, so there’s always upside for copper.”

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Mining giants including BHP, Rio, set for $US18bn coal boost – by Marcus Leroux (The Australian – October 24, 2016)

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

An unlikely resurgence in the price of coal could deliver an $US18 billion ($A23.6bn) boost to the four big mining groups listed in London.

Despite falling foul of increasingly stringent environmental regulations around the world, the unfashionable fuel has rebounded spectacularly this year, making it one of the best-performing commodities.

The leap in prices is on a similar scale to that after the Fukushima nuclear incident in 2011, which took place when China’s boom was in full flow. The rise in prices is down to the vagaries of Chinese policy. Beijing has ordered mines to cut back on production, which sent import prices soaring.

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BHP Sees Imminent Turning Point in Nickel With Deficit Looming – by Rebecca Keenan (Bloomberg News – October 20, 2016)

http://www.bloomberg.com/

BHP Billiton Ltd., the world’s largest mining company, sees the nickel market swinging into deficit because of supply threats in the Philippines and growing demand from electric vehicles and stainless steel.

“There are signs that this year could be finally the turning point for nickel with many expecting the market to be in deficit and so starting the much needed re-balancing process,” Eduard Haegel, asset president of BHP’s Nickel West unit, said at a conference in Perth Thursday. “The welcome return to balance over the next few years should see further recovery in nickel prices.”

Nickel has rebounded more than a third from the intraday low in February this year, which was the cheapest in more than a decade. Prices have been buoyed as the market awaits the final results from a nationwide audit in the Philippines, the world’s largest producer, which was ordered by President Rodrigo Duterte to ensure suppliers aren’t flouting environmental rules.

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World’s Top Miner Wants to Hire 21,000 Women – by Ann Koh and David Stringer (Bloomberg News – October 20, 2016)

http://www.bloomberg.com/

BHP Billiton Ltd. wants women to account for half of its workforce by 2025 as the world’s top miner seeks to change the gender balance in an industry dominated by men. The company isn’t “as inclusive or diverse as we could be,” Chief Executive Officer Andrew Mackenzie said in a statement on Thursday. BHP has a workforce of about 65,000, including contractors, of which 18 percent are female.

Based on these numbers, its target would mean an additional 21,000 women employed by the middle of the next decade including both its own staff and contractors, according to Bloomberg calculations.

The $800 billion mining industry has long been a male-dominated business, with women even banned from working underground in some countries until recently. Men hold a majority of executive positions in resources companies, lagging behind other sectors.

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BHP spends $2 million a month on nickel unit as recovery looms – by James Regan (Reuters U.S. – October 20, 2016)

http://www.reuters.com/

BHP Billiton’s nickel business, which faced closure after failing to attract a buyer, is spending $2 million a month on improvements and making headway to extend operations through the next decade, a senior executive said on Thursday.

Nickel prices have climbed 17 percent this year after a crippling supply glut drove the market into near-free fall 2-1/2 years ago. Global demand rose 6.1 percent over the eight months to end-August, led by an 8 percent rise in China and strong gains in India and China, industry data showed.

“There are signs that this year could finally be the turning point for nickel,” Eduard Haegel, president of BHP’s Nickel West mining and processing unit told a mining conference.

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BHP says sees early signs of commodity recovery – by James Regan (Reuters U.S. – October 19, 2016)

http://www.reuters.com/

SYDNEY – BHP Billiton, the world’s biggest diversified miner, said on Wednesday it was finally detecting indications of a commodity market turnaround, giving its most upbeat assessment in about five years.

A recovery would be a particular boon for the global miner which has kept production humming through a multi-year collapse in commodities markets, although it cautioned that raw material supply was still outpacing demand despite stronger steel consumption in China.

“We have seen early signs of markets rebalancing,” Chief Executive Andrew Mackenzie said in releasing BHP’s September quarter production report and guidance update. “Fundamentals suggest both oil and gas markets will improve over the next 12 to 18 months. Iron ore and metallurgical coal prices have been stronger than expected, although we continue to expect supply to grow more quickly than demand in the near term,” he said.

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BHP Rebukes Tax Critics After Claims of Evasion in Australia – by Jesse Riseborough (Bloomberg News – October 18, 2016)

http://www.bloomberg.com/

BHP Billiton Ltd., the world’s biggest mining company, rejected claims of tax evasion in Australia by pointing to $58 billion in taxes and royalties paid in the country over the past decade.

“We’re astonished to hear some politicians claiming that we haven’t been paying our fair share,” Jac Nasser, chairman of Melbourne-based company, told an audience of investors, executives and journalists at a company event in London on Monday night. “If we were avoiding tax, we’re clearly no good at it.”

Last week, former Australian Treasurer Wayne Swan, who was locked in a dispute with BHP and rival Rio Tinto Group over a plan to raise taxes earlier this decade, accused the company of funneling sales through its Singapore marketing hub to help lower its tax bill.

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BHP Billiton and Newcrest Mining battle for SolGold stake – by James Wilson (Financial Times – October 10, 2016)

https://www.ft.com/

BHP Billiton has joined Newcrest Mining in trying to take a stake in a little-known copper and gold explorer in a sign of miners’ renewed appetite for low-cost entry into promising projects.

The battle between two of the world’s best-known miners for a stake in SolGold, whose prize asset is in Ecuador, shows how large companies are stepping up efforts to forge partnerships with smaller rivals to restock production pipelines.

So-called “junior” companies in mining have suffered a dearth of investment since the commodities cycle turned down from 2011, while larger companies have slashed budgets for capital spending and for exploration over the same period.

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Iron Giants to Add 200 Million Tons of Supplies Through 2020 – by Jamine Ng (Bloomberg News – September 22, 2016)

http://www.bloomberg.com/

The world’s two largest iron-ore exporters Brazil and Australia will each add about 100 million metric tons of supply through the end of the decade, boosting a global glut and hurting prices in a slump that will then force marginal miners to cut output, according to Citigroup Inc.

Shipments from Brazil will expand to 480 million tons in 2020 from 371 million this year, while Australian cargoes rise to 934 million tons from 835 million, the bank said in a report. That’ll lift the surplus to 56 million tons in 2018 from 20 million this year, before price-induced curtailments help bring the global market back toward a balance, Citigroup estimates.

While iron ore has rallied in 2016, confounding predictions for renewed losses, investors are now refocusing on prospects for rising output from the top suppliers. With Brazil’s Vale SA set to start a four-year ramp-up of its S11D project, banks from Morgan Stanley to Citigroup as well as BHP Billiton Ltd. have said the additional output will probably contribute to weaker prices.

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BHP-Vale Brazil Mine Said to Weigh Missing Next Bond Coupon – by Cristiane Lucchesi (Bloomberg News – September 14, 2016)

http://www.bloomberg.com/

Samarco Mineracao SA is considering skipping bond coupon payments that are due as soon as this month as the stalled Brazilian iron-ore miner runs out of money, according to people with knowledge of the matter.

Without knowing when it can restart mining, the venture owned by BHP Billiton Ltd. and Vale SA is yet to engage in formal restructuring talks with bondholders, two of the people said, asking not to be named because the matter is private. As a result, there’s not enough time to reach a restructuring deal before the coupons are due, they said.

Once the world’s second-largest producer of iron-ore pellets, Samarco also is seeking an agreement on about $1.6 billion in bank loans to postpone payments until it restarts mining, people with knowledge said last month. A bankruptcy protection filing is among options being considered, one of the people said.

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