Archive | Rio Tinto

Glencore snaps up Rio Tinto’s Hail Creek coal mine, project for $1.7 billion – by Tom Westbrook (Reuters U.S. – March 20, 2018)

SYDNEY (Reuters) – Glencore is buying Rio Tinto’s Hail Creek coal mine and the Valeria coal project in Australia for $1.7 billion, tightening the Swiss trading and mining giant’s grip on coal as its rivals exit the industry.

The acquisition, announced by both companies on Tuesday, follows Glencore’s purchase of half of Rio Tinto’s Hunter Valley coal operations, also in Australia, for $1.1 billion last year in a deal with China’s Yancoal Australia Ltd.

Glencore is already the world’s biggest exporter of thermal coal used for power stations, and Hail Creek will give it a bigger stake in metallurgical coal used for steelmaking. Continue Reading →

As copper booms, miners take hunt to Mongolian dunes – by Barbara Lewis (Reuters U.S. – March 13, 2018)

LONDON (Reuters) – When temperatures rise and winds drop in the coming weeks, a band of explorers will hunt for copper riches in Mongolia’s Gobi Desert. For years Rio Tinto has been the sole international copper mine operator in Mongolia, bound closely to a country where it has bet billions of dollars on the giant Oyu Tolgoi project.

Others have steered clear due to the risks of operating in a nation with an unpredictable and young democracy and judiciary, a frail economy and extreme weather.

Now rising global demand for a metal used in electric cars and renewable energy, at a time of increased costs and depleted deposits in the world’s biggest copper producer Chile, is driving miners to riskier locations. Continue Reading →

Rio Tinto’s last two coal mines set to attract bids over $2.5 billion – by Sonali Paul and Clara Denina (Reuters U.S. – March 9, 2018)

MELBOURNE/LONDON (Reuters) – At least three bidders are expected to submit final offers for global miner Rio Tinto’s (RIO.AX)(RIO.L) Hail Creek and Kestrel coal mines in Australia, which could fetch up to $2.5 billion, people familiar with the process said.

The Anglo-Australian mining company made a strategic decision in 2017 to exit coal and focus on growth in iron ore, copper and its aluminum division. Hail Creek and Kestrel are Rio Tinto’s last two coal mines, following the $2.7 billion sale of its Hunter Valley coal operations in Australia to Yancoal last year.

Australia’s Whitehaven Coal (WHC.AX) is expected to bid, as well as Australian private equity firm EMR Capital along with Indonesia’s Adaro Energy (ADRO.JK). A consortium led by U.S. private equity firm Apollo Global Management (APO.N) is also expected to be in the running. Continue Reading →

Rio Tinto says US tariffs terrible for world trade but no threat to iron ore – by Brad Thompson (Australian Financial Review – March 7, 2018)

One of Rio Tinto’s most senior executives has warned that the last thing the world needs is a trade war sparked by the Trump administration’s protectionism.

Rio Tinto iron ore chief executive Chris Salisbury said the threat by US President Donald Trump to impose tariffs on steel and aluminium imports raised the prospect of a destabilising trade conflict.

“As a mining company we rely on free flow of trade around the world,” he said. “We don’t get a choice in where the resources are and we need to get those resources to our customers, so anything that impedes that obviously does concern us.” Continue Reading →

Australia watchdog takes Rio Tinto, executives to court over Mozambique deal – by Sonali Paul (Reuters U.S. – March 2, 2018)

MELBOURNE (Reuters) – Australia’s corporate watchdog said on Friday it has launched court action against miner Rio Tinto (RIO.AX)(RIO.L) and two former executives for misleading investors about the coal reserves it reported in a $4 billion acquisition in Mozambique.

The Australian Securities and Investments Commission said the company, its former Chief Executive Tom Albanese and former Chief Financial Officer Guy Elliott had made deceptive statements in their 2011 annual report, published in 2012.

“ASIC alleges that RTL (Rio Tinto Ltd) engaged in misleading or deceptive conduct by publishing statements in the 2011 annual report, signed by Mr Albanese and Mr Elliott, misrepresenting the reserves and resources of RTCM (Rio Tinto Coal Mozambique),” the commission said in a statement. Continue Reading →

Iron ore grade war boosts Vale as Evy Hambro exits Fortescue – by Peter Ker(Australian Financial Review – February 28, 2018)

Australian iron ore exporters’ geographic advantage over South American rivals has been largely eroded by China’s growing preference for higher grade iron ore, according to the giant Brazilian miner that stands to benefit most from the trend.

Vale’s claim to now be matching the profit margins on each tonne of iron ore sold to China by the likes of Rio Tinto and BHP comes as Evy Hambro’s BlackRock World Mining Trust confirmed that it had exited Fortescue Metals Group’s share register because of the wider price discounts being applied to Fortescue’s iron ore

The average iron content of Vale’s ore has recently risen to 64.3 per cent with the introduction of the high-grade S11D mine in Brazil’s Carajas region, and the arrival of that mine has coincided with Chinese steel mills paying a premium for higher grade iron ore as they seek to improve environmental efficiency. Continue Reading →

COLUMN-For coal miners, it’s time to exit or get rich – by Clyde Russell (Reuters U.S. – February 25, 2018)

LAUNCESTON, Australia, Feb 26 – It seems coal miners are adopting one of two disparate strategies, either exit the business in a highly visible way to buff up your climate credentials, or sit tight, keep as quiet as possible and rake in the cash.

An example of the public exit from the business is South32 , the Perth-based miner spun out of BHP Billiton which is in the process of selling out of its thermal coal assets in South Africa.

Mike Fraser, South32’s president and chief operating office for South Africa, told Reuters earlier this month that the company was aiming to sell its coal assets because it “did not believe in the commodity.” It would also be better if the coal mines were majority-owned by black investors, Fraser said. Continue Reading →

China Wealth Fund Joins Fray for $2 Billion Rio Portfolio (Bloomberg News – February 8, 2018)

The Chinese sovereign wealth fund is considering joining the bidding for Rio Tinto Group’s last remaining coal mines, which may fetch more than $2 billion, people familiar with the matter said.

China Investment Corp. is discussing making a joint offer with Australian private equity firm EMR Capital Advisors Pty, which was among shortlisted bidders for the Hail Creek and Kestrel mines, according to the people.

Suitors are scheduled to make site visits to the operations in Australia’s Queensland state this month ahead of the final bid deadline in March, the people said, asking not to be identified because the information is private. Continue Reading →

Rio Tinto denies Dutch NGO allegation it avoided Oyu Tolgoi tax – by Barbara Lewis (Reuters U.S. – January 31, 2018)

JOHANNESBURG (Reuters) – Rio Tinto on Wednesday denied allegations by a Dutch non-profit organization that it had avoided paying $700 million of tax to Mongolian and Canadian authorities relating to its giant Oyu Tolgoi copper project.

Rio Tinto is investing about a $1 billion a year at Oyu Tolgoi in the Gobi Desert, where it operates a mine and is building an underground extension that would add approximately 500,000 tonnes of production a year in the next decade.

The Centre for Research on Multinational Corporations, known as SOMO, alleged in a report that Rio and its Canadian subsidiary Turquoise Hill used so-called mailbox companies in the Netherlands and Luxembourg to avoid $470 million in Canadian taxes and $230 million in Mongolian taxes. Continue Reading →

The Canadian company behind this Mongolian mine has avoided half a billion dollars in taxes, report alleges – by Marco Chown Oved (Toronto Star – January 31, 2018)

A Canadian mining company operating in one of the world’s biggest copper deposits has avoided more than half a billion dollars in Canadian tax over the last seven years, according to a report released Wednesday.

By using a complex network of tax haven subsidiaries and lending money to itself at high interest rates, Turquoise Hill Resources has also deprived the government of Mongolia — where the mine is located — of an additional $230 million (U.S.), states the report produced by the Dutch non-profit SOMO.

“It’s shameless tax avoidance,” said Vincent Kiezebrink, one of the report’s authors. “It doesn’t just affect the world poorest, but also regular people in Western countries as well.” Continue Reading →

Mongolia slaps $155M tax bill on Turquoise Hill’s mine; NGO claims company owes more – by Gabriel Friedman (Financial Post – January 30, 2018)

Turquoise Hill Resources Ltd. and parent Rio Tinto Group’s ambition to build one of the world’s largest copper and gold mines, called Oyu Tolgoi, in Mongolia’s Gobi Desert, has hit a number of stumbling blocks in recent weeks.

Last week, Jean-Sebastien Jacques, the chief executive of Rio Tinto, flew to Mongolia’s capital city to meet with prime minister Ukhnaagiin Khurelsuk about how to build “win-win” partnerships.

One looming dispute is the Mongolian government’s claim that Oyu Tolgoi owes an additional US$155 million in taxes — the mine’s second tax dispute since 2014. Continue Reading →

U.S. SEC says Rio Tinto, ex-CEO, ex-CFO must face fraud case – by Jonathan Stempel (Reuters U.S. – January 23, 2018)

NEW YORK (Reuters) – The top U.S. securities regulator on Tuesday rejected arguments by Rio Tinto Plc and two former top executives that its civil lawsuit claiming they concealed the plunging value of coal assets owned by the big Anglo-Australian mining company should be dismissed.

In letters filed with the U.S. District Court in Manhattan, the Securities and Exchange Commission said its complaint adequately alleged that fraud occurred, and that Rio Tinto, former Chief Executive Thomas Albanese and former Chief Financial Officer Guy Elliott intended to deceive investors.

Rio Tinto responded by referring to its statement in October that it believed the lawsuit was unwarranted and that a court or jury would reject the SEC’s claims. Continue Reading →

Rio Tinto builds bauxite expansion option at Amrun – by Peter Ker (Australian Financial Review – January 23, 2018)

Rio Tinto’s $US1.9 billion ($2.4 billion) Amrun bauxite project is being built with foundations to support a much bigger expansion in the future, with the project now more than 75 per cent complete.

Approved by the Rio board in November 2015, the Amrun team will soon award some of the major contracts associated with the project, including for shiploaders, reclaimers and stackers. Amrun will produce 22.8 million tonnes of bauxite per year starting in mid 2019, with 10 million tonnes of that set to replace a nearby mine that is close to retirement.

Rio’s growth and innovation executive Stephen McIntosh said the size of the resource at Amrun could support a more than doubling of production in the future if Rio ever chose to pursue further expansion. Continue Reading →

Rio Tinto digs deeper into Mongolia – by Melanie Burton and Terrence Edwards (Reuters U.S. – January 22, 2018)

MELBOURNE/ULAANBAATAR (Reuters) – Global miner Rio Tinto will set up a new office in the Mongolian capital, separate from its giant Oyu Tolgoi project, to focus on exploration and local ties, strengthening its commitment to one of the world’s greatest copper prospects.

Mongolia’s proximity to neighbouring China, the world’s biggest copper consumer, has attracted interest from international prospectors as an anticipated leap in electric vehicle demand and renewable energy would increase consumption of a commodity that already has multiple uses.

But some investors are nervous about the unpredictability of Mongolia’s young democracy and Rio Tinto, which is operating an expansion project at the Oyu Tolgoi copper mine in Mongolia, has had difficult negotiations with the government in the past. Continue Reading →

Great Iron Ore Wave Set to Peter Out as Shippers Hold Steady – by David Stringer (Bloomberg News – January 15, 2018)

Rio Tinto Group forecasts its iron ore shipments will remain flat this year or rise by 3 percent at most, reinforcing market sentiment that a wave of new supply is turning into a trickle.

The world’s second-largest exporter expects shipments from Western Australia of between 330 million metric tons and 340 million tons in 2018, the company said Tuesday, confirming guidance published last month. That compares with 330.1 million metric tons recorded last year.

Top exporters “clearly haven’t pushed the envelope too hard” and are showing restraint over additions to supply, Daniel Hynes, a Sydney-based analyst at Australia & New Zealand Banking Group Ltd., said Tuesday in a Bloomberg Television interview. Continue Reading →