BHP – Page 27 – Republic of Mining

South32 Ltd., the diversified miner that’s cutting its global workforce on lower commodity prices, says its loss-making and strike-threatened Colombian nickel asset must deliver a plan to return to profits in the coming fiscal year to remain in operation.

Cerro Matoso is facing a deadline of July 2017 to demonstrate how it’ll begin to improve cash flow, Chief Executive Officer Graham Kerr said in an interview Thursday in Melbourne. The Perth-based producer is continuing talks with union members at the asset to avert a planned strike this month amid a dispute over a wage offer, he said.

“If they are not cash flow positive, if they can’t show me a plan to be cash flow positive, well we shouldn’t be running,” Kerr said. “We can’t cross-subsidize across the group, so if we can’t restructure if a way that makes sense, well then we won’t produce.”

South32 sees more pain ahead for miners – by Sonali Paul (Reuters U.S. – June 2, 2016)

June 2, 2016

MELBOURNE – Australia’s South32 Ltd expects base metals and coal prices to give up recent gains, inflcting more pain on debt heavy rivals who will eventually be forced to shut loss-making operations, its chief executive said on Thursday.

Spun off by BHP Billiton a year ago with little debt, South32 produces nickel, manganese, aluminium and coal, commodities that have all slumped over the past year due to oversupply and slowing growth in China.

Chief Executive Graham Kerr said the rebound in coal and metals prices during the current quarter is unsustainable, given that markets are still oversupplied. “I think there’s a little bit of pain still to come,” Kerr told Reuters in an interview.

Workers Vote to Strike at South32’s Cerro Matoso Nickel Mine – by Andrew Willis and David Stringer(Bloomberg News – May 29, 2016)

May 30, 2016

Workers at South32 Ltd.’s Cerro Matoso, the world’s second-biggest ferro-nickel mine, voted to take strike action amid a dispute over negotiations on a wage agreement.

Members of the Sintracerromatoso union approved the move at the operation in northern Colombia, the union’s negotiator Eder Blanco confirmed in a text message. A strike must begin before June 14, and a deal to avert the action could be reached before then.

A previous strike at Cerro Matoso in April 2015 caused output to fall, leading to an increase in global prices. The nickel complex is among the world’s largest, with output of 27,200 metric tons in the nine months to March 31.

Perth-based South32 will continue to seek a resolution of the dispute, spokesman Tony Johnson said by phone.

Educate Aborigines in STEM skills to help them and the nation – by Andrew MacKenzie (The Australian – May 27, 2016)

May 27, 2016

Andrew Mackenzie is the chief executive of BHP Billiton.

The benefit that Australia stands to gain from making Aboriginal and Torres Strait Islander people part of the nation’s economic growth is an opportunity we can’t afford to miss.

On this day 49 years ago, Australians voted overwhelmingly to allow Aboriginal and Torres Strait Islander peoples to be included in the census. It was Australia’s most successful referendum and the message of inclusion was made crystal-clear.

This time last year our company was one of a growing number of businesses that publicly stood up to support formal recognition of the first Australians in the Constitution. As we celebrate Reconciliation Week this year, I’m convinced there is more we can do to support a reconciled Australia.

One powerful way that businesses like ours can contribute is to make sure all Australians have the opportunity to share in our country’s growth and prosperity.

‘Real Spark’ for Copper Demand Is Renewable Energy, BHP Says – by David Stringer (Bloomberg News – May 26, 2016)

May 26, 2016

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

Renewable energy and China’s economic shift toward consumer-led growth will be major catalysts for a new wave of copper demand that’ll accelerate a shortage forecast to develop from 2019, according to BHP Billiton Ltd., the world’s largest mining company.

“The real spark, though, is the demand for renewables,” said Jacqui McGill, asset president for BHP’s Olympic Dam copper mine, the world’s fifth-largest deposit of the metal. “Regardless of where the energy’s coming from, it needs copper.”

Mining companies, including rival Rio Tinto Group, are racing to meet the forecast global deficit as output is constrained at existing mines on lower grades. By 2040, the share of global electricity generated from renewable energy sources, including solar and wind, will double to 46 percent, Bloomberg New Energy Finance estimates.

BHP and Vale have started rebuilding towns affected by the Samarco dam disaster – by Peter Ker (Sydney Morning Herald – May 20, 2016)

May 20, 2016

BHP Billiton has built numerous towns around Australia over the past 131 years, and now it will turn its hand to building towns in Brazil.

The Australian miner and its partner in the tragic Samarco dam disaster, Vale, is set to rebuild the Brazilian town of Bento Rodrigues at a different location, after the town residents voted to rebuild about 12 kilometres away. Bento was the town worst affected by November’s deadly dam failure, which killed 19 people and swamped Bento under tonnes of mud.

Displaced residents were put into rental accommodation in late 2015, and they voted earlier this month on where their town should be rebuilt.It is believed 95 per cent of the residents voted and 92 per cent of those voted in favour of rebuilding at the new location.

Higher-cost China mines seize iron ore market recovery: Rio chief – by Paul Garvey and Matt Chambers (The Australian – May 20, 2016)

May 20, 2016

Rio Tinto’s iron ore chief Andrew Harding says the miner has already seen a rise in production from marginal mines in China as a result of the improved iron ore price of recent months.

Speaking to The Australian after a speech at an Austmine function in Perth yesterday, Mr Harding said higher-cost iron ore mines of China had been quick to seize on the recovery in market conditions. “What you will always see as a price moves up is supply moves in. We’ve seen that in recent times, the output from Chinese mines went up,” Mr Harding said.

His comments came as rival BHP Billiton issued a pessimistic diagnosis on iron ore prices. Despite recent upgrades from analysts, BHP’s chief mining analyst declared the price rally in the nation’s biggest export was temporary and that fundamentals looked unconvincing.

Brazil mining dam reforms unsettle companies, do little for safety – by Stephen Eisenhammer and Marta Nogueira (Reuters U.S. – May 11, 2016)

May 12, 2016

“Chernobyl of the Mining Industry”

RIO DE JANEIRO – Brazilian regulators plan to tighten rules on dams used in the mining industry after a breach last year caused the nation’s worst environmental disaster but the changes, while opposed by struggling companies, look unlikely to improve safety.

Environmental authorities say they will demand an increase in the number and focus of audits for hundreds of dams holding mining waste, known as tailings. They also want to limit the size of dams and how often their walls can be raised to store more waste.

But engineers, prosecutors and tailings dam experts interviewed by Reuters say the changes will do little to prevent another tragedy if Brazil’s chronically under-resourced regulators are not themselves improved.

Higher earnings the priority for BHP Billiton chief – by James Wilson (Financial Times – May 8, 2016)

May 9, 2016

http://www.ft.com/

BHP Billiton will set out plans to boost earnings growth this week to woo disgruntled investors and try to dispel the gloom that a fall in commodity prices has cast over the mining industry.

Putting forward a strategy to raise earnings at the world’s largest mining group by market capitalisation has become a priority for Andrew Mackenzie, chief executive, as he seeks to move BHP beyond last year’s defensive measures to withstand the commodities downturn.

Investors dumped shares in miners last year as prices for many commodities fell to some of their lowest levels in a decade. BHP, a big oil and gas producer as well as a miner, was also under pressure as crude prices tumbled alongside iron ore and copper.

Vale-BHP’s Samarco Faces $43 Billion Suit for Dam Disaster – by R.T. Watson and Yasmine Batista (Bloomberg News – May 3, 2016)

May 3, 2016

Brazilian prosecutors filed a civil suit worth 155 billion reais ($43 billion) against Vale SA, BHP Billiton Ltd., and Samarco Mineracao SA for a November tailings dam burst that killed as many as 19 people and caused severe environmental damage, according to a document from the prosecutors office obtained by Bloomberg.

The prosecuting task force is demanding an initial payment of 7.8 billion reais within 30 days, according to the document. The civil suit, which prosecutors said they put together after a six-month investigation, also targets Brazil’s federal government along with both Minas Gerais and Espirito Santo state governments, the prosecutors office said in a statement earlier Tuesday.

Samarco’s $1 billion in bonds due in 2022 fell 4.8 percent to 57 cents on the dollar at 4:30 p.m. in Sao Paulo, the biggest drop since Dec. 21. In March, Samarco and its co-controllers signed an agreement with the federal government and the two states committing to pay as much as 12 billion reais over the next 15 years.

Iron ore prices fall after surge as BHP lifts supply – by Matt Chambers (Matt Chambers – April 25, 2016)

April 25, 2016

This year’s budget-boosting run in iron ore prices has hit a snag, with prices falling after mining giant BHP Billiton poured cold water on talk it would slow supply and China moved to curb speculation in steel and iron ore markets.

But even after a 6 per cent drop on Friday night, prices of the nation’s biggest export remain higher than anyone had previously expected before the end of last week, as Scott Morrison prepares to hand down the federal budget next week.

Benchmark iron ore prices tracked by Metal Bulletin fell $US4.13 to $US66.33 a tonne overnight on Friday, taking some gloss off a stunning run in prices last week that saw them hit a 15-month high of $US70.46 the previous day.

Iron ore price spike not sustainable: BHP’s Mike Henry – by Matt Chambers and Barry Fitzgerald (The Australian – April 22, 2016)

April 22, 2016

BHP Billiton’s new boss of its Australian mining operations, Mike Henry, says the rebound in iron ore prices to 10-month highs cannot last and the forces underpinning the surge will last a few months at best.

Mr Henry also had a message for Canberra: get moving on workplace reform. Claiming the call for reform was “election-cycle agnostic”, Mr Henry said reform was needed “to allow us to continue to grow, not just the industry, but the economy’’.

Iron ore has soared $US25 a tonne, or 63 per cent, from a low of $US39.30 a tonne on January 13 to $US64.77, fuelling massive share price recoveries and prompting thoughts of a tax boost for Canberra. But Mr Henry said that as much as he would like to see the higher prices sustained (they are now comfortably up on last year’s average of $US56 a tonne), the current level is not baked on.

UPDATE 2-BHP Billiton weighs getting out of Indonesian coal – by Sonali Paul (Ruters U.S. – April 20, 2016)

April 20, 2016

MELBOURNE, April 20 BHP Billiton is considering quitting its coal assets in Indonesia, where it recently started shipping steel-making coal from a small mine, amid uncertainty over Indonesian regulations and a weak outlook for coal.

BHP owns a 75 percent stake in the IndoMet Coal project, having sold the rest to Indonesia’s Adaro Energy in 2010 for $335 million. Coal asset prices have collapsed since then, and analysts said BHP would be lucky to fetch $200 million now for the stake in a largely undeveloped resource.

“Does it move the dial for BHP? No. But it’s a really high quality met-coal property and potentially a fantastic opportunity for an Indonesian company with the right connections,” said Shaw & Partners analyst Peter O’Connor.

Brazil wants Samarco to stop leaks before operations resume – by Marta Nogueira (Reuters U.S. – April 6, 2016)

April 7, 2016