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How an Australian Mining Town Became a Solar Power Trailblazer – by James Paton (Bloomberg News – December 20, 2015)

http://www.bloomberg.com/

Broken Hill spawned the world’s largest mining company and generated more than $75 billion in wealth. Now as its minerals ebb, Australia’s longest-lived mining city is looking to tap a more abundant resource.

On the sun-baked edge of the Outback city, 700 miles west of Sydney, a solar farm the size of London’s Hyde Park shimmers like an oasis — its panels sending enough electricity to the national grid to power 17,000 homes a year. Combined with a sister plant, the AGL Energy Ltd. and First Solar Inc.project is the largest of its type in the southern hemisphere.

Clean energy advocates are counting on the 140-hectare (346-acre) development to make Broken Hill, which at one time boasted the world’s most successful silver mine, a trailblazer once again.

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COLUMN-Should iron ore miners become an oligopoly to rescue prices? – by Clyde Russell (Reuters India – December 15, 2015)

http://in.reuters.com/

Dec 15 – One of the largely unseen side-effects of the massive increase in iron ore supply and the subsequent collapse in prices is that the industry is now one of the most concentrated in the resources sector.

As any student of economics can tell you, highly-concentrated supply tends to lead to oligopolistic behaviour, in which the major producers limit output in order to drive prices higher.

This clearly hasn’t happened, and isn’t currently happening in iron ore, despite about 75 percent of traded supply being delivered by just four producers.

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Iron Ore in $30s Seen Near Tipping Point for Largest Miners – by Jasmine Ng and David Stringer (Bloomberg News – December 8, 2015)

http://www.bloomberg.com/

Iron ore’s tumble into the $30s threatens the world’s biggest miners as prices approach break-even costs, according to Capital Economics Ltd. BHP Billiton Ltd. shares slumped to the lowest in 10 years and Rio Tinto Group dropped to the lowest since 2009.

The most expensive operations at the four largest suppliers are on the verge of making losses at rates below $40 a metric ton, said John Kovacs, senior commodities economist at Capital Economics in London, who estimates their break-even levels at $28 to $39, taking into account freight and other costs.

While these producers will keep output strong, they’ll be constrained by low prices, he said by e-mail on Monday.

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Iron Ore Nearing Rio’s `Fantasy Land’ Shows Depth of Turmoil – by Jesse Riseborough (Bloomberg News – December 7, 2015)

http://www.bloomberg.com/

When Rio Tinto Group’s Sam Walsh, head of the world’s second-biggest iron-ore exporter, was asked 10 months ago whether the steelmaking raw material could reach $30 a metric ton, he derided it as impossible.

“That’s fantasy land — it simply can’t happen,” Walsh, 65, said in a February interview with Bloomberg Television. “There are very wild forecasts out there that quite frankly just can’t come to pass, otherwise it’s going to be very lonely for us as the lowest-cost producer in the world.”

The comments by Walsh, who headed Rio’s iron-ore business for nine years and is regarded as a veteran in the industry, shows how the pace and depth of the market’s retreat has caught the world’s biggest mining companies off guard.

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Rio Tinto closes gap on BHP Billiton in biggest miner race – by Matt Chambers (The Australian – December 7, 2015)

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

BHP Billiton’s long-held title of world’s biggest miner is under threat from rival Rio Tinto as sliding oil prices, BHP’s South32 spin-off and the tailings dam disaster at BHP’s half-owned Samarco operations in Brazil have ensured the gap in market value between the pair has closed to its narrowest since before the China boom.

At the end of last week, Bloomberg data showed that BHP’s market capitalisation of $92 billion (including Australian and London-listed shares) was just $13bn higher than Rio’s $79bn, with the gap as close as $10bn during the week.

This is the closest the pair have been since 2003 and a sharp tightening since the middle of last year, when BHP was worth about $200bn and Rio was worth $110bn.

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Rio, BHP Billiton keep faith in China’s future steel demand – by Matt Chambers (The Australian – December 5, 2015)

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

Rio Tinto chief Sam Walsh says depressed iron ore prices face sustained pressure over the next couple of years even as Gina Rinehart’s $10 billion Roy Hill project and an expansion by Brazil’s Vale force more higher-cost producers out of the market.

But Mr Walsh and his counterpart at BHP Billiton, Andrew Mackenzie, both say future Chinese steel demand is being underestimated by many forecasters not factoring in substantial regional exports from the Asian powerhouse.

“As you see the Vale and Roy Hill (iron ore) tonnes come on, that’s going to put on some pressure,” Mr Walsh told The Weekend Australian in Melbourne during the week.

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Iron Ore on the Cusp of $30s as BHP, Rio Shares Extend Slump – by Jasmine Ng (Bloomberg News – December 3, 2015)

http://www.bloomberg.com/

Iron ore is on the cusp of dropping into the $30s a metric ton as the biggest producers expand supply and the onset of winter in China dulls demand that’s been hurt by the slowdown in growth in the world’s top user. Miners’ shares retreated.

“The outlook remains grim for iron ore fines because end-demand from construction and manufacturing is uncertain,” said Jessica Fung, an analyst at BMO Capital Markets in Toronto. “Steel inventories have been building.”

Spot ore with 62 percent content delivered to Qingdao fell 0.9 percent to $40.75 a dry ton on Thursday, a record low in daily prices compiled by Metal Bulletin Ltd. dating back to 2009. It’s dropped each day this week, losing 8.4 percent.

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The iron ore price is in free-fall – by Frik Els (Mining.com – December 2, 2015)

http://www.mining.com/

Iron ore fell to a record low on a spot price basis on Wednesday with the Northern China 62% Fe import price including freight and insurance (CFR) dropping 2.4% to $40.60 a tonne.

After a strong recovery from its July low, the steelmaking raw material has been on a relentless decline since mid-October. Losses so so far this year come to 43% following. Today’s price compare to $190 a tonne hit February 2011 and an average of $135 a tonne in 2013 and $97 last year.

For an iron ore price below $40 you have to go back to 2007 when annual contract pricing between the Big 3 producers – Vale, Rio Tinto and BHP Billiton – and Chinese and Japanese steelmakers were still the industry norm.

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Brazil sues BHP, Vale for $5 billion in damages for mine disaster – by Anthony Boadle (Reuters U.S. – November 30, 2015)

http://www.reuters.com/

BRASILIA – Brazil filed a lawsuit on Monday against two of the world’s largest mining companies for 20 billion Brazilian reais ($5.2 billion) to clean up what it says was its worst environmental disaster, caused by the collapse of a tailings dam.

The governments of Brazil and those of two states hit by the damburst sued iron ore operator Samarco and its co-owners, the world’s largest miner BHP Billiton Ltd and the biggest iron ore miner Vale SA.

Earlier on Monday, President Dilma Rousseff blamed the disaster on the “irresponsible action of a company” in a speech to the COP21 climate change summit in Paris. “We are severely punishing those responsible for this tragedy,” she said.

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BHP battered by UN’s claims of toxic tailings – by Barry Fitzgerald and Matt Chambers (The Australian – November 28, 2015)

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

If there was a saving grace to the tailings dam collapse at BHP Billiton’s half-owned Germano mine in the mountains of Brazil’s Minas Gerais state, it was that the iron ore waste which has since found its way to the Atlantic Ocean some 600km away was not toxic.

That was the accepted truth from BHP and Brazil’s Vale, BHP’s equal partner in the mine, and the mine’s operating company Samarco. After all, BHP managing director Andrew Mackenzie had seemed to say so, and he’s one of the great geoscientists of the modern era. Last year he became a fellow of the world’s premier scientific club, London’s Royal Society. Past fellows have included Albert Einstein, Charles Darwin and Isaac Newton.

So when Mackenzie said that the tailings material that hurtled down the valley floor after the tailings dam was breached on November 5 was “relatively inert’’, there was relief all around.

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BHP sees coal price getting worse before it gets better – by Mark Ludlow (Australian Financial Review – November 25, 2015)

http://www.afr.com/

A senior BHP Billiton executive has warned the market for Australian resources will get a lot worse before it gets better, saying it would be “dangerous” to invest in a new mine based on the assumption coal prices will recover.

As big miners continue to cut costs following a plunge in international coal prices, BHP Billiton Mitsubishi Alliance asset president Rag Udd painted a bleak picture of the resources sector in Australia.

“I think it’s dangerous to try and align a business around prices improving in metallurgical coal. I personally think it will get worse before it gets better,” Mr Udd told a Queensland Resources Council forum in Brisbane on Wednesday.

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Mud from Brazil dam burst is toxic, U.N. says – by Stephen Eisenhammer and Sonali Paul (Reuters U.S. – November 26, 2015)

http://www.reuters.com/

RIO DE JANEIRO – Mud from a dam that burst at an iron ore mine in Brazil earlier this month, killing 12 people and polluting an important river, is toxic, the United Nations’ human rights agency said on Wednesday.

The statement contradicts claims by Samarco, the mine operator at the site of the rupture, and Samarco’s co-owner, BHP Billiton (BHP.AX)(BLT.L), that the water and mineral waste contained by the dam are not toxic.

Citing “new evidence,” the UN’s Office of the High Commissioner for Human Rights said in a statement the residue “contained high levels of toxic heavy metals and other toxic chemicals”.

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Brazil dam collapse reignites debate over storing mining waste – by James Regan and Susan Taylor (Reuters U.S. – November 18, 2015)

http://www.reuters.com/

SYDNEY/TORONTO, Nov 19 A deadly mud slide at an iron ore mine in Brazil has reignited calls for safer ways to dispose of millions of tonnes of ore waste held back by man-made dams.

The disaster at the Samarco iron ore mine is only the latest in a series involving tailings – waste in mining parlance – that have devastated the environment, and in the case of Samarco, killed at least 11 people and left another 12 missing.

Tailings are typically a mud-like material and their storage and handling has become a major safety and environmental issue, since they can be toxic and may need to be kept isolated.

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Mine Disasters Seen Showing Cost of Cheap Waste Solutions – by Danielle Bochove (Bloomberg News – November 18, 2015)

http://www.bloomberg.com/

As miners globally review the way they store waste in the wake of another horrific dam spill, the solution may be as simple as it is dramatic: spend a lot more.

Images of sludge spewing into towns and rivers could be a thing of the past if mines used different types of storage such as removing water or building on more stable ground. While that can be as much as 10 times costlier for companies already squeezed by slumping prices, the cost is much higher when things go wrong.

The cleanup bill for the Nov. 5 spill at the Samarco iron-ore venture in Brazil, owned by BHP Billiton Ltd. and Vale SA, probably will exceed $1 billion, Deutsche Bank AG said. Then there’s lost output and potential lawsuits.

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Copper price recovery at least three years off, says BHP Billiton – by Amanda Saunders (Australian Financial Review – November 18, 2015)

http://www.afr.com/

BHP Billiton does not expect depressed copper prices to lift for at least the next three years, but is confident in a comeback around 2019, when the market should start to shift into a “total under-supply situation”.

Copper prices have been languishing around six-year lows for much of this year, smashing Glencore’s share price and also putting pressure on copper majors BHP and Rio Tinto. Overnight on Tuesday, the price of copper – which is seen as a proxy for global economic activity – sank to a fresh six-year low of $US4590 a tonne.

Prices for BHP’s four key “pillar” commodities – copper, oil, iron ore and metallurgical coal – have taken a beating in 2015.

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