BHP – Page 29 – Republic of Mining

BHP Billiton Ltd still likes giant Saskatchewan potash project, but not in any hurry to develop – by Peter Koven (National Post – February 24, 2016)

February 24, 2016

http://business.financialpost.com/

The world’s biggest mining company says it is still keen to build the world’s biggest potash mine, despite a severe bear market in the crop nutrient. But it sure doesn’t seem to be in a hurry.

Andrew Mackenzie, BHP Billiton Ltd.’s chief executive, told investors on Tuesday that he doesn’t expect the potash market to make a serious recovery until the early 2020s. “It’s a long way off,” he said on a conference call to discuss half-year earnings.

Melbourne, Australia-based BHP is in the midst of a US$2.6-billion investment to build production shafts at its Jansen project in Saskatchewan. Jansen would be a game-changer in the industry, as BHP is aiming to produce eight million tonnes of potash a year, which would amount to nearly 15 per cent of global supply.

BHP Should Buy Freeport – by David Fickling (Bloomberg News – February 22, 2016)

February 23, 2016

http://www.bloomberg.com/

If there’s any big mining deal that should be happening right now, it’s a takeover of Freeport-McMoRan by BHP Billiton.Most large resources companies pick either solids (mining) or liquids (oil and gas). BHP and Freeport are rare in keeping a foot in both camps. They also share an optimistic view of the long-term outlook for Freeport’s key assets, copper and petroleum.

The fact a deal isn’t happening is one of those odd omissions reminiscent of Sherlock Holmes’s dog that didn’t bark:“Is there any other point to which you would wish to draw my attention?”“To the curious incident of the dog in the night-time.”“The dog did nothing in the night-time.”“That was the curious incident,” remarked Sherlock Holmes.

The attractions of a deal for BHP are obvious. It would easily become the world’s biggest copper miner, leaving current leader Codelco in the dust. The Australian company would end up with control of all three of the world’s biggest copper pits — Escondida, Grasberg and Morenci — and its output of the metal would more than double overnight.

Iron ore extends rally, surging through $US50 mark – by Jasmine Ng (Bloomberg/Australian Financial Review – February 23, 2016)

February 23, 2016

http://www.afr.com/

Iron ore, the whipping boy of commodities last year as world supply overwhelmed demand, has clawed its way back above $US50 a metric ton.

Ore with 62 per cent content rallied 6.2 per cent to $US51.52 a dry ton on Monday, the highest level since October 27, according to Metal Bulletin. The commodity has jumped 18 per cent this year after plunging to $US38.30 in December, the lowest in more than six years.

“There is a bit more optimism in the air – a clear contrast to November and December, which had a distinct graveyard atmosphere,” Philip Kirchlechner, Perth-based director at Iron Ore Research Pty, said by email ahead of the figures. While prices were tough to predict, a range of $US45 to $US55 seemed reasonable for the first half, he said.

BHP Cuts Dividend for First Time in 15 Years on Profit Drop – by David Stringer (Bloomberg News – February 23, 2016)

February 23, 2016

http://www.bloomberg.com/

BHP Billiton Ltd. made a larger-than-expected cut to its dividend, lowering the payout for the first time in 15 years, as the world’s biggest mining company seeks to protect its balance sheet and credit ratings amid a price collapse that saw first-half profits tumble 92 percent.

Underlying profit fell to $412 million at its continuing operations in the six months to Dec. 31, from $4.9 billion a year earlier, Melbourne-based BHP said Tuesday in a statement.

Its first-half dividend was cut to 16 cents from 62 cents a year earlier and the company said it will adopt a policy to provide payouts at a minimum of 50 percent of underlying attributable profit. The payout had been forecast to drop to 31 cents, according to Bloomberg data.

Bet against Rio Tinto, BHP Billiton as iron ore rally won’t last, says Liberum Capital – by Jasmine Ng (Australian Financial Review/Bloomberg – February 18, 2016)

February 18, 2016

http://www.afr.com/

Iron ore’s recent gains may prove to be unsustainable and there’s now a fresh opportunity for investors to bet on losses in miners’ shares, according to Liberum Capital, which listed Rio Tinto Group and BHP Billiton among candidates for selling short.

“You could be forgiven for thinking iron ore is turning a corner,” analysts including Richard Knights and Ben Davis said in a note on Wednesday, citing gains in prices since December, plans by miners to cut supply growth and Chinese import data. “We don’t think so and see the recent sector rally as an opportunity to re-instate shorts in Rio, Anglo and BHP.”

Iron ore has rebounded in 2016 after three years of losses spurred by rising low-cost supply from the world’s largest miners including Rio, BHP and Brazil’s Vale, which is set to report production data this week. Seaborne supply will still increase by about 6 per cent in 2016 and demand from China is weakening, according to Liberum.

BHP Billiton, Vale facing $7 billion fine for Brazil’s biggest environmental disaster – by Emily Moulton (February 10, 2016)

February 12, 2016

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

IT TOOK decades to build and just minutes to completely destroy. This is what remains of Bento Rodrigues, the small Brazilian village that was flattened by a 20m wall of toxic mud that spewed out of a burst tailings dam from a nearby mine site in the Mariana region of Minas Gerais in the south east of the country.

An estimated 40-60 million cubic metres of thick sludge swept through, without warning, swallowing just about everything in its path.

Residents, who had lived in the shadow of the Samarco Mineiracoes mine, a joint venture between Vale SA and the Australian-owned BHP Billiton for the past decade, reportedly had just 25 minutes to flee for their lives.

As pressure on BHP and Glencore grows, Australia cuts may signal nickel revival – by Melanie Burton (Reuters U.S. – February 10, 2016)

February 10, 2016

http://www.reuters.com/

MELBOURNE – Australian nickel miners are under increasing pressure to suspend or cut production, with investors eyeing key announcements in coming weeks after rival producers in New Caledonia won a pledge of support from France.

Benchmark prices of the steel-making material have fallen more than 45 percent since early 2015 to their lowest since 2003, and are seen grinding lower amid ample global stocks and slowing property growth in top consumer China.

Glencore and BHP Billiton, whose high-cost Murrin Murrin and Nickel West facilities are struggling to sustain operations, are both due to make production and profit reports in coming weeks. News of any output cuts could buoy prices.

Norway’s sovereign wealth fund asked miners to consider coal demergers – by Peter Ker (The Age – February 7, 2016)

February 8, 2016

http://www.theage.com.au/

Norway’s influential sovereign wealth fund asked mining companies in its investment sphere to consider spinning out their coal assets in 2015.

The fund, which is a top five shareholder in BHP Billiton, made the request just months before BHP spun out South32. The coal push was revealed in the fund’s 2015 annual report. It also shows the fund divested from 73 companies in 2015 for ethical and governance reasons.

The fund has made headlines in recent years for its increasingly strict stance against investing in fossil fuels. It took the stance further in 2015 by asking miners to consider divestments of their own.

Brazil’s Vale Needs To Turn Its Iron Ore Into Pixie Dust Before Investors Really Get Excited – by Kenneth Rapoza (Forbes Magazine -February 4, 2016)

February 5, 2016

http://www.forbes.com/

Don’t believe the hype on raw materials companies today. Especially the China-bound miners like Brazil iron ore giant Vale . Thursday’s dubious 11.6% intraday rise in Vale shares will not stand. The same holds for rival company Rio Tinto and its Aussie business partner BHP Billiton .

All raw material plays rose on Thursday on a weaker dollar as the market considers a pauses in Fed rate hikes. While the stock has been beaten to smithereens over the last five years, losing nearly 90% of its share value, Vale’s business is in trouble.

Fitch said this week that the Vale and BHP joint venture, Samarco Mining, is heading to a default following last year’s rupturing of a dam. This will cost Vale and BHP hundreds of millions of dollars in legal fees and clean up costs. Not to mention reputational damage. But the real kicker likes far far away, in China.

South32 to write off $2.4bn, signals job to be cuts – by Paul Garvey (The Australian – February 5, 2016)

February 4, 2016

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

BHP Billiton spin-off South32 will take another $US1.7 billion ($2.4bn) writedown, slash production, sack 620 workers and explore the potential for hundreds more job cuts around Australia in the strongest demonstration yet of the company’s “value over volume” philosophy.

Shares in South32 soared more than 14 per cent after it confirmed it would scale back its South African manganese operations indefinitely in response to the global slump in manganese prices.

It said it was looking at “substantial” job cuts at operations including its Illawarra coalmines in NSW, its Worsley alumina operation in Western Australia and its manganese mines on Groote Eylandt in the Northern Territory.

BHP Billiton’s credit rating cut one notch by S&P, Rio Tinto may be next – by Jesse Riseborough (Australian Financial Review/Bloomberg – February 2, 2016)

February 1, 2016

http://www.afr.com/

BHP Billiton, the world’s biggest mining company, had its credit rating cut at Standard & Poor’s.

The rating was lowered to A from A+ to reflect changes in commodity forecasts and “very challenging market conditions and increased demand uncertainty over the coming years”, S&P said in a statement on Monday. Ratings for the Melbourne-based miner may be lowered one notch further after it releases earnings on February 23, S&P said.

“Metal prices have come under pressure because of fears of lower demand from China, and excess supply remains an issue,” the rating company said in a statement. “Moreover, particularly relevant for BHP Billiton, the oversupply of crude oil in the market results in very weak oil and Henry Hub gas prices, which we now believe will last over the foreseeable future, putting further pressure on its balance sheet.”

No place like home in Broken Hill for BHP Billiton’s Andrew Mackenzie – by Amanda Saunders (Sydney Morning Herald – January 28, 2016)

January 29, 2016

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

BHP Billiton chief executive Andrew Mackenzie has taken some time away from the pain the company finds itself in to make a “pilgrimage” to the place it all began for the miner – Broken Hill.

When asked if the visit to BHP’s birthplace provided him with some comfort given what the the miner is going through, Mr Mackenzie said: “Yes, very simply put, it is quite uplifting.”

“In the 130 years since we’ve started here we’ve faced our fair set of challenges, so I am not going to magnify those today, or the ones that have been faced in the past.

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.

Rio Tinto, BHP Billiton edge out Brazil’s Vale in iron ore cargo shipments to China – by Jasmine Ng (Australian Financial Review – January 27, 2016)

January 27, 2016

http://www.afr.com/

Bloomberg – Cargoes from Australia, the top exporter, accounted for 64 per cent of China’s imports last year from 59 per cent in 2014 and 51 per cent the year before. Brazil’s share rose to 20 per cent in 2015, 2 percentage points higher than in 2014.

The figures from customs data signal that the strategies pursued by Rio Tinto Group and BHP Billiton in Australia and Brazil’s Vale of raising output to defend market share may be paying off as prices tumble.

The price of iron ore sank 39 per cent last year as supply topped demand, growth slowed in China and lower energy costs and producer currencies enabled miners to pare costs.

Samarco sensors gave warnings well before Brazil damburst: Globo – by Jeb Blount and Brad Haynes (Reuters U.S. – January 25, 2016)

January 26, 2016

http://www.reuters.com/

RIO DE JANEIRO – Brazilian iron ore miner Samarco Mineração SA received serious danger warnings from ground sensors in 2014 and 2015, before a deadly dam burst last November that caused widespread environmental destruction, Globo TV’s Fantastico news magazine said on Sunday.

The alerts, from probes driven deep into the dam’s structure to detect ground moisture and stability, reached as high as “emergency” levels, Fantastico said, citing Samarco-commissioned engineering studies provided to prosecutors investigating the case. The damburst is considered by many to be the worst environmental disaster in Brazil’s history.

Samarco, a 50-50 joint venture between Brazil’s Vale SA and Australia’s BHP Billiton Ltd, is in talks with Brazilian federal and state prosecutors and environmental agencies to settle a 20 billion real ($5 billion) public lawsuit.